Operating Environment Overview | Kenyan Banking Institutions (Jul 2022)

Kenya’s economy registered a strong rebound in 2021 after the COVID-19 shock in 2020. Real GDP growth accelerated to 5.1% in 2021 after contracting by 0.3% in 2020, according to the International Monetary Fund “(IMF”). Notwithstanding this, the economic outlook remains exposed to global and domestic risks due to continued COVID-19 challenges, tightening global financing conditions, and possible pickup in political tension related to Kenya’s upcoming general elections scheduled for August 2022. New challenges include drought in the northern regions of the country and emerging security needs. The IMF provided emergency COVID-19 pandemic support in May 2020, and in April 2021 approved a three-year financing package (c.US2.3bn) to support the next phase of Kenya’s COVID-19 response and the government’s plan to reduce debt. The IMF funding support program will also advance Kenya’s broader reform and governance agenda, including addressing weaknesses in some state-owned enterprises (“SOEs”), strengthening transparency and accountability through the anti-corruption framework, strengthening the monetary policy framework, and supporting financial stability.

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Operating Environment Overview | Ugandan Banking Institutions (Jul 2022)

Uganda is located in East-Central Africa with a population of 43.7m. The country has substantial natural resources, including fertile soils, regular rainfall, substantial reserves of recoverable oil, and small deposits of copper, gold, and other minerals. Uganda relies heavily on agriculture which is about 25% of the economy, 50% of exports and 70% of employment, and this has contributed to wage income volatility and stagnation. Investment plans in the Ugandan oil sector are expected to start producing and exporting by 2024/25. Oil revenues and taxes are expected to become a larger source of government funding as oil production starts.

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Operating Environment Overview | Burundian Banking Institutions (Jul 2022)

Burundi Is a small, landlocked country in East Africa and is one of the poorest countries in the world with close to 75% of its 12.6m population living below the poverty line. Burundi’s economy is heavily reliant on the agricultural sector (mainly exporting coffee and tea) which, despite the extreme paucity of arable land, employs 80% of the population. Poverty overwhelmingly affects small rural farmers.

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Operating Environment Overview | Ethiopian Banking Institutions (Jul 2022)

Ethiopia is a landlocked country on the Horn of Africa and is the largest and most populous country in that region. With a population of 101.3m people, Ethiopia is the second most populous nation in Africa after Nigeria, and the fastest growing economy in the region. However, it is also one of the poorest, with a per capita income of about USD890. Ethiopia’s location gives it strategic importance due to its proximity to the Middle East and its markets. More than 70% of Ethiopia’s population is still employed in the agricultural sector contributing about 32.5% of GDP as at 1H2021, although the services sector (39.6%) has surpassed agriculture as the principal source of GDP, with industry (29.3%) also registering a significant contribution. Over the past 15 years, Ethiopia’s economy has been among the fastest growing in the world (at an average of 9.5%). Among other factors, growth has been led by capital accumulation, in particular through public infrastructure investments. However, according to the International Monetary Fund (“IMF”), Ethiopia’s real GDP growth slowed to 6.1% in 2020 and was 6.3% in 2021, due to the COVID-19 crisis with growth in industry and services easing to single digits. Furthermore, the domestic security situation (instability in the Tigray and Oromia region) have created significant health, social and economic challenges. However, agriculture was not significantly affected by the COVID-19 pandemic and its contribution to growth slightly improved in 2021 compared to the previous year. The government’s wide-ranging policy responses have mitigated some of the impact of the crisis while supporting macroeconomic stability. The National Bank of Ethiopia (“NBE”, “central bank”) injected liquidity into the market, providing much needed support to the banking system and firms that were adversely affected.

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Operating Environment Overview | Rwandan Banking Institutions (Jul 2022)

Rwanda is a relatively small landlocked, hilly, and fertile country in east-central Africa with a densely packed population of 13.3m. It borders the far larger and richer Democratic Republic of Congo, as well as its closest East African neighbors - Tanzania, Uganda, and Burundi. Rwanda has guarded its political stability since the 1994 genocide of the Tutsi. With the support of the International Monetary Fund (“IMF”) and the World Bank, the country has been able to make important economic and structural reforms and sustain its economic growth rates over the last decade. Tourism, minerals (gold, tin ore, tungsten ore), coffee, and tea are Rwanda's main sources of foreign exchange. However, inadequate infrastructure (electricity, water, internet, affordable financial services), instability in neighbouring states, and lack of adequate transportation linkages to other countries has hampered private sector growth.

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Operating Environment Overview | Tanzanian Banking Institutions (Jul 2022)

Tanzania is located in Eastern Africa with a population of 61.5m. The country's eastern border is the Indian Ocean with a coastline of 1,424km. Zanzibar is also part of Tanzania and consists of two main islands: Unguja and Pemba, and a number of smaller islands located 40km off the mainland coast. The country relies heavily on agriculture which accounts for more than 40% of GDP, 60% of exports (cashew nuts, sesame seeds, tobacco) and 65% of the total workforce, although gold production has increased to about 35% of exports in recent years. Apart from agriculture, tourism, mining (gold, iron and diamonds) and small-scale industries are increasingly contributing to national economic growth. According to the World Bank, following two decades of sustained growth, Tanzania reached an important milestone in July 2020, when it formally graduated from low-income country to lower-middle-income country status. Tanzania’s achievement reflects sustained macroeconomic stability that has supported growth, in addition to the country’s rich natural endowments and strategic geographic position.

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Mozambique Banking Industry Overview (Jul 2022)

Mozambique is located in Southeastern Africa with a population of 33.1m. The country is endowed with ample arable land, water, energy, as well as mineral resources and newly discovered natural gas offshore; three deep seaports; and a relatively large potential pool of labour. Its long Indian Ocean coastline of 2,500km faces east to Madagascar, and means that it is also strategically located, with four of the six countries it borders landlocked, and thus dependent on Mozambique as a conduit to global markets. Notwithstanding this, about two-thirds of the population live and work in rural areas. The country’s main challenges include maintaining macroeconomic stability considering exposure to commodity price fluctuations and making further efforts to re-establish confidence (following external debt scandals in 2015 that led to donor withdrawal) through improved economic governance and increased transparency. Mozambique remains vulnerable to weather shocks (including cyclones) and is also currently grappling with an Islamic terrorist insurgency in parts of the gas-rich province of Cabo-Delgado.

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Cabo Verde Banking Industry Overview (Jul 2022)

Cabo Verde with a population of just 0.6m, is an archipelago of ten islands located 500km off the west coast of Africa. The population is spread across the islands that are scattered within a large area, which constitutes a major constraint to growth and development. Only 10% of Cabo Verde’s territory is classified as arable land, and the country possesses limited mineral resources. Consequently, the small island economy is driven by tourism which benefits from year-round attractive weather, and supported by a stable democracy, limited security risks and the proximity to Europe. The Cabo Verdean exchange rate has been pegged to the Euro since 1999, at a rate of 110.265 CVE/EURO.

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Angola Banking Industry Overview (Jul 2022)

Angola, with vast mineral and petroleum reserves, ranks as the third largest economy in sub-Saharan Africa after Nigeria and South Africa. The country is the second largest oil producer in Sub-Saharan Africa after Nigeria. According to the International Monetary Fund (“IMF”), over the last 5 years, crude oil and oil products have accounted for about 96% of Angola’s total exports, 56% of fiscal revenues, and 34% of Angola’s total real gross domestic product. Moreover, some non-resource sectors, such as the construction and agriculture sectors, have historically been correlated with the oil sector. The transformation of a state-led oil economy to a private-sector-led growth model is a complex and long-term process and the oil sector will continue to play an important role during this transition period according to the World Bank. Since 2016, Angola has experienced negative economic growth attributed largely to the significant drop in oil prices and a substantial reduction in oil production. Resulting national budget cuts, currency devaluations and high inflation levels slowed import levels and hindered economic growth. In 2020, the COVID-19 outbreak further exacerbated economic, social and health vulnerabilities on the heavily oil reliant economy, leading to a fifth straight year of recession. The economy contracted -5.4% in 2020 (the deepest yearly contraction in three decades), after contracting by 0.5% in 2019, on the back of weak oil production, the collapse in oil prices, and the spillover to non-oil sectors.

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Peer Comparatives for Tanzania Short Term Insurance (Jul 2022)

GCR introduces the Peer Comparatives for Tanzania Short Term Insurance. The report forms part of the Short Term Insurance Peer Comparatives series, containing key metric comparatives and summarised financial synopses of insurance entities that operate within select markets, and are publicly rated by GCR. Each report provides statistical tables and graphs reflecting collated trends and relative metrics for premium income, underwriting & net profitability, and solvency & liquidity, and provides a comparison of balance sheet and income statement data over the past five years.

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