Dfcu Bank has announced its financial results for the first half of fiscal year 2024, reporting an improved performance in Net profit after tax, which increased by 45% to Shs42 billion in June 2024 from Shs29 billion in June 2023.

Half-Year Financial Highlights:

Net profit after tax increased by 45% to Shs42 billion in June 2024 from Shs29 billion in June 2023. This growth is attributed to significant reduction in credit losses from loans and advances, owing to sustained recoveries efforts

It was also attributed to reduction in the interest expense cost as a result of a deliberate effort to balance the bank’s deposits drivers and growth in fees and commission arising from the increase in transacting customers year on year

Compared to the full year 2023, this performance was an increase of Shs13.6 billion, a 48% growth year on year.

Net loan loss provisions decreased significantly by 114% from a loss of Shs50 billion in June 2023 to a credit of Shs6 billion in June 2024. The decrease resulted from management’s efforts to reduce the non-performing loans and diversify the portfolio thereby lowering the concentration risk.

Management continues to closely monitor the non-performing loans to rehabilitate them and make recoveries. The current strategy resulted in the reduction of the non – performing loans ratio from 15.2% in June 2023 to 5.2% in June 2024.

The bank’s asset base increased by Shs6.5 billion from Shs3,158 billion in December 2023 to Shs3,164 billion in December 2024. The growth was mainly attributed to the increased investment in government securities that registered a growth of 4% (Shs36.5 billion), a strategy by management to diversify earning assets given the cautious approach to credit risk during the first half of the year.

The Company’s deposit base remained flat at Shs2,319 billion in June 2024 from December 2023. Management continues to drive a balance in the bank’s deposit mix, keeping interest costs within target.

Shareholders’ funds grew by 6% from Shs644 billion in December 2023 to Shs684 billion in June 2024 arising from the increase in retained earnings at half year.

The Company remains well capitalized with capital ratios of 29% and 30% for core and total capital respectively. Liquidity position remains strong with an average liquid assets ratio above 40%. Considering this robust liquidity and healthy capital position, management is optimistic that the Company is well positioned for future growth and higher financial performance.

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Mobile giant MTN has registered an increment in the value of their shares on the stock market.

The current share price of MTN Uganda is Shs177.99.

MTN Uganda closed its last trading day on Thursday August 22, 2024 at Shs177.99 per share on Uganda securities Exchange (USE) recording a 1.1% gain over its previous closing price of Shs176.00.

The price per share of MTN was at Shs170 eight weeks ago while as per yesterday, the share was at Shs176.99 while as per this morning, the price per share had increased to Shs177 meaning there has been an increment by Shs1 from yesterday’s Shs176.99. it has gone up by Shs

Top shareholders are MTN Group Limited which has 83.1% holding 18,593,811,989 shares. National Social Security Fund (NSSF) 9.53% holding 2,132,631,877 shares. Charles Mbire 4% holding 895,561,877 shares while minimal other shares are held by Bank of Uganda retirement scheme.

Based on the above, the price of NSSF earned worth Shs16,338,061,855 billion ($4. 416,677 million) from MTN share price increment as Mbire who doubles as chairmen of MTN whose value of his shares went up by Shs7,155,538,862 billion ($1,931,995 million) in eight weeks.

In conclusion, NSSF value of MTN shares has gone up by $4.4166 million and Mbire has also gone up by $1,931, 995 million in eight weeks of trading.

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Manufacturing sector players have called for a reduction in the cost of digital tax stamps (DTS) in a bid to drive usage by all the targeted users.

The manufacturers claim that the high costs of digital tax stamps continue to hinder the growth of the manufacturing sector.

Uganda Breweries Managing Director Andrew Kilonzo said that the earlier promise was that once all manufacturers embrace digital tax stamps, the cost of the stamps would reduce, but that has not been achieved. 

“The promise of the system was that all manufacturers would get into it and ensure a level playing field. However, in the outlets, you will see our products, such as Uganda Waragi bearing tax stamps, being sold next to items that do not have them,” he said.

In Uganda, the use of DTS was rolled out in the financial year 2019/20 following the launch of the Domestic Revenue Mobilization Strategy by the Finance Ministry. DTS was also aimed at addressing revenue leakages. 

In Kenya, DTS was rolled out in 2013, while Tanzania and Rwanda both launched DTS in 2019. While the intention behind these measures is commendable, the varying costs of digital tax stamps across the region have created a complex business environment. For each country, the cost of the stamp for each category of goods has been set out in the respective regulations governing the operation of DTS. 

The solution providers for DTS are the same across the region, but the cost of stamps differs significantly. The stamp fee is additional to the excise duty tax payable under the country’s respective Excise Act. 

In Uganda, DTS costs are at Shs110 (wines and spirits) and Shs36 for beer; in Kenya, DTS charges are Shs134.88 for wines and spirits and Shs80.93 for beers. Tanzania’s charges for DTS are Shs51.75 for wines and spirits, Shs23.02 for locally produced beers) and Shs27.58 for imported beers, while for Rwanda, DTS charges are Shs761.13 and Shs152.23 for spirits and wines, respectively. 

According to Kilonzo, the high cost of digital tax stamps keeps the cost of doing business high; hence, some manufacturers find value in avoiding the stamps.

“Maybe we need a different approach, if you bring down the cost of digital tax stamps, it stops being a barrier, and you get more players embracing it, hence driving volumes up.” 

Kilonzo said that through the Farm for Success Program, Uganda Breweries is supporting people in farming communities who supply the organization with raw materials such as sorghum and barley used in alcoholic beverage production. 

On an annual basis, Uganda Breweries invests Shs52 billion in farmers involved in the supply of raw materials. 

“We are touching the lives of at least 50,000 farmers; we work with the National Agricultural Research Organisation (NARO) to improve the yields; we were very excited when the government came with the Parish Development Model (PDM) because we are exactly working with people in communities,” he stated. 

Decarbonizing efforts 

In April 2024, UBL commissioned a state-of-the-art Shs37 billion biomass plant.

The facility represents a substantial investment by UBL and excellent progress in its decarbonizing journey. Powered by locally sourced biomass materials, the plant also exemplifies UBL’s dedication to harnessing sustainable manufacturing while offering livelihood opportunities to local communities.

“We have cut our carbon emissions by 92% and by 2030, we want to be carbon neutral; we are almost there. What’s remaining is for our diesel generators for backup, but we are looking for the solution,” said Kilonzo.  

The commissioner general of the Uganda Revenue Authority (URA), John Musinguzi, pledged to push for a review of the costs of digital tax stamps.

“The cost of implementing DTS is designed to be manageable and is outweighed by the benefits of improved tax compliance and the reduction of illicit trade. Our primary challenge is not the system’s expense but ensuring that all businesses comply with these necessary regulations,” he noted.

Since its introduction in 2019, DTS has significantly broadened Uganda’s tax base, with a notable increase in registered manufacturers and importers. 

The system has been pivotal in curbing tax evasion and enhancing supply chain transparency across various sectors. However, resistance to full compliance in certain sectors continues to undermine its potential benefits.

“We have observed a significant improvement in sectors where compliance is high,” the CG noted.

URA statistics underscore that DTS not only serves as a regulatory tool but also stimulates economic activity by leveling the playing field among businesses.

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CEO Summit Uganda, a leading think-tank, together with National Social Security Fund have launched the Lean Forward Modular Program, a comprehensive initiative aimed at transforming the leadership landscape by empowering women to take on top roles in their industries.

The program, which kicks off on August 23, 2024, is designed to address the challenges women face in leadership, providing them with practical tools, perspectives, and support to thrive. Participants will engage in workshops, mentorship sessions, and interactive modules, learning from experienced leaders and peers.

“It is with immense pride that I welcome you to the launch of the Lean Forward Modular Program, a comprehensive and diverse leadership program aimed to equip female leaders with the tools and confidence to tap into their potential and succeed as leaders within their organizations,” said Stephen Mukasa, Country Lead at CEO Summit Uganda.

“Leadership begins with self-awareness, and this program is more than just a course; it’s a movement about changing the narrative, breaking down barriers, and building a future where women are leaders who drive change, inspire innovation, and create lasting impact,” Mukasa added.

The six-month program will focus on nurturing a diverse leadership landscape, examining identities as leaders, and recognizing leadership potential. With only 32.2% of women in senior leadership positions worldwide, this initiative aims to close the leadership gender gap.

“By offering mentorship, training, and opportunities for professional growth, the Lean Forward Modular Program is designed with a clear and focused mission to empower women with the tools, perspectives, and confidence needed to excel,” Mukasa remarked.

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The government has selected five banks to offer loans to the Generating Growth Opportunities and Productivity for Women Enterprises (GROW) project.

The five banks – Dfcu, Equity, Finance Trust, Centenary, and Post Bank – will provide loans ranging from Shs4 million to Shs200 million to eligible women-owned businesses.

The government disbursed Shs29.1 billion to these banks where women entrepreneurs in small and medium business space will be accessing cheap loans to boost their business courtesy of World Bank’s Generating Growth opportunities and productivity of women enterprises project (GROW).

The GROW project, funded by the World Bank and implemented by the Private Sector Foundation Uganda (PSFU), aims to support women entrepreneurs in transitioning from micro to small and medium-sized enterprises.

According to Dr. Ruth Aisha Biyinzika Kasolo, Project Coordinator of the GROW project, the project will benefit over 28,000 enterprises across the country, promoting women’s economic empowerment and entrepreneurship development.

“We are committed to supporting women entrepreneurs in Uganda, and this partnership with five leading banks will provide critical funding and support to help them grow and succeed,” said Dr. Biyinzika.

The loans will be repayable within two years, with competitive interest rates of 10.5% and 10%, depending on the bank’s terms. Beneficiaries who repay their loans on time will also receive a grant of up to 5% of the loan principal.

The Vice President Jessica Alupo, is expected to officially launch the GROW loan program at an event to be held at Hotel Africana next week, marking a significant milestone in the project’s journey to empower women entrepreneurs in Uganda.

The project was launched in 2023 with the objective to increase access to entrepreneurial services that enable female entrepreneurs to grow their enterprises including in refugee host districts.

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