issue 356 | 14 Jun 2020
A non-exhaustive list of recent measures aimed at curbing the spread of Coronavirus
Africa: Africa’s aviation industry will suffer an estimated revenue loss of USD8.103-billion this year as a result of COVID-19 pandemic, according to a latest report by the African Airlines Association (AFRAA). The impact assessment analysis shows passenger revenue dropped to USD0.403-billion in Q1 2020 which represents 13.8% Year-over-Year with more impact seen in Q2 of this year, costing USD2.740-billion. The analysis, which is the first in a series of studies that will be published by the association examining the toll of the pandemic on Africa’s air transport sector, indicated that recovery is expected to start from the third quarter of 2020 with domestic operations, followed by regional and intercontinental flights.
Source: The EastAfrican
Kenya: Businesses have received a big boost following the review of the curfew hours, which will be between 21:00 and 04:00, as President Uhuru Kenyatta relaxed measures aimed at containing the spread of COVID-19. Businesses such as supermarkets and banks now say that they will extend their working hours to serve more customers following the directive.
Source: Business Daily
Kenya: Listed firms are now changing their regulations to allow for virtual annual general meetings (AGMs) to accommodate realities such as COVID-19 that have made large physical gatherings impossible. State ban on physical gatherings had stalled holding of AGMs, which are usually crucial for endorsing dividend payments and voting new leaders. This was, however, unlocked by the High Court order in April that granted special window for Nairobi Securities Exchange (NSE) firms to hold virtual meetings with clearance from the Capital Markets Authority (CMA). Listed companies seeking to hold virtual AGMs must first convince the CMA that the shareholders are well informed, can transparently ask questions and vote. The CMA has said the approval process would take two weeks before the regulator can issue a no-objection letter. Then the companies must issue a 21-day statutory notice of the intended general meeting to shareholders.
Source: Business Daily
Malawi: Commercial banks have induced a marginal increase in reference rates, a situation which would see borrowers paying a little bit more in interests on their loans. In published statements, some commercial banks indicated that they had increased the reference rate from 13.3% in May to 13.4% in June. Bankers Association of Malawi Chief Executive Officer, Lyness Nkungula attributed the adjustment to a rise in treasury bills rate.
Malawi: The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has urged the Treasury to avoid excess borrowing and enhance prudence in fiscal management to build resilience as a step towards recovery of the economy in the face of COVID-19. The industry captains have asked the government to prioritise the health and agriculture sectors on its recovery path.
Mauritius: The Finance Minister, Dr Renganaden Padayachy delivered his maiden Budget Speech. He has charted an ambitious project for the Mauritian economy to bounce back from the COVID-19 crisis. This budget proposes an ambitious MUR100-billion roadmap for Mauritius to weather the ongoing economic storm and bounce back, through a plan to revive economic growth and private investment, fast-track construction and infrastructure projects, promote entrepreneurship, incentivise food security and import substitution through the domestic agro-processing and manufacturing. Exports promotion strategies are being widened and deepened for the manufacturing and tourism sectors. To safeguard the soundness of the global business sector and the financial sector in general, the authorities have committed to take necessary measures to comply with international best practice, including action on Financial Action Task Force (FATF) standards and risk-based supervision.
Nigeria: Travel and hospitality businesses have been worst hit by the COVID-19 pandemic and may never recover unless the Federal Government provides ‘substantial support’ to the industry, the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) has said. NACCIMA urged the Federal Government to urgently adopt measures to protect and stimulate the travel and hospitality trade in the country.
Source: Head Topics
Rwanda: A set of strategies unveiled on Tuesday, 9 June by the Rwanda Mines, Petroleum and Gas Board (RMB) could facilitate mineral processing and trading companies to resume full operations, allowing the sector to recover from the COVID-19 pandemic. For the next two years, the government will reorganise small scale mining operators, consolidate many of them into collective investment groups and license their new collective companies. Other recovery measures include defining mining and mineral exploration as priority in Rwanda’s Investment Code, and establishing a Mineral Exploration Support Fund.
Source: The New Times
Rwanda: Private technology developers, tour and travel agencies among other stakeholders in the tourism industry have agreed that digital tourism is the new approach that will help the tourism sector to recover from the effects of COVID-19. During an innovative tourism and hospitality online meeting, they explored existing opportunities and new innovations that are required to revamp the sector which was the most hit by the pandemic.
Source: KT Press
Rwanda: Rwanda is easing lockdown in other parts of the country, but citizens disregarding the COVID-19 instructions have forced the government to put part of Rusizi district, Western Province back into total lockdown. On Thursday, 4 June, a total lockdown was imposed on Kamembe town in Rusizi district bordering with Democratic Republic of Congo and its surrounding sectors. A communique from the Ministry of Local Government reads: “Due to the assessment of the Health Ministry, effective today, the town of Kamembe including sectors of Kamembe, Mururu, Nyakarenzo and a part of Gihundwe must stay at home for at least the next two weeks.”
Source: KT Press
Rwanda: The Central Bank has issued guidelines for the Economic Recovery Fund estimated at over USD200-million (approximately RWF186-billion) aimed at supporting local businesses that are hardest hit by the COVID-19 pandemic. The regulator has released a directive on the operationalisation of the fund to all the 16 local banks as well as Limited Liability Micro-Finance Institutions. The fund will be managed by the Central Bank and disbursed through local financial players.
Source: The New Times
Rwanda: The Government of Rwanda and the European Union have signed an addendum to a financing agreement for EUR52.87-million (about RWF55.5-billion) to support the social protection coverage in response to the COVID-19 crisis. This grant is part of the EU’s EUR460-million package of support to Rwanda signed in September 2014 with the European Commission. The objective of the funding is to support the Rwandan government to expand social protection and promote agriculture supply chains in the context of the government`s COVID-19 Economic Recovery Plan through increased cash transfers and food assistance to Rwandan citizens.
Source: KT Press
Tanzania: Tanzanian authorities said the 44th Dar es Salaam International Trade Fair (DITF) will be held from 1 to 13 July with all COVID-19 precautions in place. A statement by the Ministry of Industry and Trade issued in the capital Dodoma said the DITF held annually at the J.K. Nyerere grounds in the commercial capital Dar es Salaam will observe all guidelines issued by health authorities to protect exhibitors and visitors against COVID-19. Themed ‘Industrial Economy for Employment and Sustainable Trade’, the 44th DITF will introduce business-to-business virtual meetings to avoid mass gatherings, said the statement.
Tanzania: Tanzania's Zanzibar authorities have announced reopening of tourism activities after they were shut down on 20 March following the outbreak of COVID-19. "Zanzibar today has opened its tourism activities to normal, both for charter flights and scheduled flights," said Mahmoud Thabit Kombo, Zanzibar's minister of Information, Tourism and Heritage. "All tourist hotels, restaurants and bars in Zanzibar are open from today," Kombo told Xinhua.
Source: PD Online
Tanzania: Tanzania has put in place several strategies to ensure the smooth reopening of the country’s economy amid the COVID-19 pandemic. Now, health minister Ummy Mwalimu and minister of Information, Culture, Arts and Sports, Harrison Mwakyembe have issued a number of directives to minimise the spread of the virus as many activities resume.
Source: The EastAfrican
Uganda: Private sector players who first proposed a deferral of Pay As You Earn (PAYE) tax now want a total waiver saying the effects of COVID-19 on the economy have turned out much more devastating than they had earlier projected. President Museveni on Thursday, 4 June said government will defer the payment of PAYE by private companies that have been hard-hit by the lockdown for nearly three months now.
Source: Daily Monitor
Uganda: The Bank of Uganda on 8 June took another step to cushion the economy against the effects of the COVID-19 pandemic by reducing its interest rate from 8% to 7%. The Bank of Uganda believes that the reduction in the rates will support rejuvenation in Uganda’s economic activities, control inflation, as well as stablise interest and exchange rates.
Source: Daily Monitor
BurundiOutgoing Burundian President Pierre Nkurunziza dies
Burundi’s outgoing President Pierre Nkurunziza has died, the government of the central African nation announced in a statement posted on Twitter. “The government of the Republic of Burundi announced with great sadness ... the unexpected death of his Excellency Pierre Nkurunziza, President of Burundi,” it said in a tweeted statement, adding he had died of a heart attack. Last month Burundi elected a new leader, retired general Evariste Ndayishimiye of the ruling CNDD-FDD party. According to Burundi’s constitution, the president of the National Assembly, Pascal Nyabenda, is now supposed to take over. Nkurunziza died at a hospital in Karuzi in central Burundi, according to the statement. His health improved on Sunday and he spoke to people but “surprisingly, on morning of Monday June 8, 2020, his health suddenly deteriorated and he had a heart attack”. Doctors provided “cardiopulmonary resuscitation” over the course of many hours but were unable to save him.
Cabo VerdeCabo Verdean lawmakers pass maritime economic zone bill
The Cabo Verdean legislature has passed a bill to set up a maritime special economic zone on and around the island of São Vicente, which China will back, A Nação reports. The Cabo Verdean newspaper says the members voted for the bill unanimously. The report says the bill sets out how to organise, develop and operate the zone. The zone may help develop industries on São Vicente that exploit the sea, creating jobs and boosting exports, A Nação quotes the government as saying. In January the Cabo Verdean state-run news agency, Inforpress, reported that the plan for the zone envisaged a container terminal, a ship repair yard, as well as a logistical facility for exports of fish on São Vicente’s eastern Saragaça tip.
EthiopiaThe African Development Bank gives USD1.2-million for Ethiopia-Sudan railway study
The African Development Bank’s Board of Directors has approved a USD1.2-million grant to Ethiopia’s government to finance a feasibility study into a standard-gauge railway (SGR) link between Ethiopia and neighbouring Sudan. This grant from the African Development Fund, the Group's concessional-rate lending arm, covers 35% of the total cost of the study, estimated at USD3.4-million. The remaining funding will be provided by the New Partnership for Africa's Development Infrastructure Project Preparation Facility (NEPAD-IPPF) in the form of a USD2-million-grant, and by a contribution of USD100,000 each from the two countries involved. The financing was approved in January. The two-year comprehensive feasibility study into the rail project between Ethiopia and Sudan will assess its technical, economic, environmental and social viability, and alternative financing arrangements, including a public-private partnership (PPP). The railway line will link Addis Ababa in Ethiopia to Khartoum in Sudan, with an extension to Port Sudan on the Red Sea. The route, agreed by both governments, stretches some 1,522 kilometres from Addis Ababa to Port Sudan.
Source: African Development Bank Group
GhanaGhana government says to ensure level playing field in telecommunications market
The National Communications Authority (NCA) will in the coming days begin the implementation of specific policies to ensure a level-playing field for all network operators within the telecommunications industry. Government, through the Ministry of Communications, has directed the NCA to enforce the provisions of the Electronic Communications (EC) Act, 2008 and the National Telecommunications Policy to address glaring disparities in market share and revenue share in the sector. This Policy Directive is motivated by evidence of a growing market imbalance and creation of a near monopoly in the telecommunications sector, a statement signed by the minister of Communications, Mrs Ursula Owusu-Ekuful said. The statement said the imbalance potentially exposed the country to the dictates of the dominant operator and negatively impacts on competition and choice for the consumer as well as investments within the sector. The policy is therefore aimed at ensuring proper and healthy competition among telecommunications players, secure a much better pricing policy for the consumers and facilitate a sound regulatory regime.
Source: Ghana Business News
KenyaKRA new rules target e-commerce
The Kenya Revenue Authority (KRA) is targeting e-commerce platforms with new taxes to fund the KES3-trillion 2020/2021 budget. Under the draft 2020 Value Added Tax (Digital Market Supply) Regulation, downloadable digital contents, subscription based media, software programmes, electronic data management and supply of music, film and games will be taxed. Others include search engines and automated help desk services, online tickets, e-learning platforms, audio, vision or digital media, transport hailing platforms, among others. "A person supplying taxable services through a digital marketplace shall be required to register for VAT in Kenya," the regulation says. Treasury Cabinet Secretary Ukur Yatani has mooted plans to tax such digital platforms such as WhatsApp and Facebook as part of effort to meet and fund a budget that is currently facing constraints. Such challenges include infrastructure projects under the Big Four Agenda and reviving the economy.
Source: Business Daily
KenyaKenya overtakes Angola as third-largest economy in sub-Sahara Africa
Kenya has overtaken Angola as the third-largest economy in sub-Sahara Africa, International Monetary Funds’ (IMF) fresh estimates released Friday has shown. The East Africa’s largest economy, that has been the fourth largest economy in the sub-Sahara Africa, has surpassed Angola to become third-largest economy in dollar terms. Kenya is now behind Nigeria and South Africa. Bloomberg reports that Angola has contracted every year since 2016 as oil output declined, and the kwanza was devalued in 2019 while Kenya’s shilling held steady. The COVID-19 pandemic and restrictions to limit its spread will probably see Angola’s gross domestic product contract 1.4% in 2020, while Kenya’s is projected to grow by 1%, according to the IMF report.
Source: Business Daily
KenyaMPs step up bid to tax online firms
Global online firms generating cash in Kenya’s cyberspace will start paying taxes in the next six months if Parliament enacts the Finance Bill, 2020 into law. The Bill establishes a digital service tax payable by both foreign and local entities that derive income in Kenya through a digital market place. Firms are supposed to offset the digital service tax paid against the tax payable for that year of income. The proposed law has not defined the threshold of what constitutes the amount of tax payable under digital services but stipulates that payment made under the new tax shall be due at the time of the transfer for the service to the providers. The taxman, in a futile attempt, tried to introduce taxation on the digital marketplace through the Finance Act 2019. Introduction of such a tax is set to put Kenya on a collision path with multinationals like American technology giant Google, which had in August 2019, warned against imposition of tax on digital transactions. The taxman is fast tightening the noose on e-commerce firms. The Kenya Revenue Authority published a draft 2020 Value Added Tax (Digital Market Supply) Regulation.
Source: Business Daily
MozambiqueMozambique to build 25 dams in next 20 years to ensure climate resilience – Noticias
Mozambique’s National Water Resources Management Plan foresees the construction of 25 dams in the next 20 years, as a central part of the process of creating climate resilience in the main hydrographic basins in the country. In addition to increasing water supply and storage capacity crucial to facing droughts, gains in energy generation are also being considered. To carry out these projects, the government must mobilise an investment in the order of USD13.6-billion. These projections were advanced a few days ago in Maputo by Messias Macie, National Director of Water Resources at the Ministry of Public Works, Housing and Water Resources, at a press conference presenting the sector’s climate change strategy. Macie spoke about the construction of the dam on the Megarruma River in Cabo Delgado, whose planning is at an advanced stage, and its pre-feasibility study completed. This enterprise will have the capacity to store around 181 million cubic metres of water.
Source: Club of Mozambique
MozambiqueFID on Mozambique’s Rovuma LNG project delayed until 2021
Mozambique’s National Petroleum Institute (INP) has announced that the final investment decision (FID) for its planned USD30-billion Rovuma liquefied natural gas (LNG) project will be taken by ExxonMobil in 2021. The Rovuma LNG project’s FID was expected to take place in the first half of 2020, but in March ExxonMobil indicated capex cuts and moving forward was unlikely, due to the COVID-19 pandemic and the oil price collapse. The LNG project is expected to extract natural gas for liquefaction from a deep-water block offshore Mozambique containing more than 85 trillion cubic feet of natural gas. ExxonMobil’s capital investment for 2020 is forecast to be about USD23-billion, down from the USD33-billion previously reported. The oil major’s reduced spending is accomplished through improved efficiencies, reduced market prices and a slower project pace.
Source: Africa Oil & Power
NigeriaFG bars debtors from bidding for oil fields
Companies, including their promoters, indebted to the federal government will not be allowed to participate in the newly launched bid round for marginal oilfields, the Department of Petroleum Resources (DPR) has said. The DPR, in a document, said applicants should demonstrate the ability to fully meet the objective of undertaking expeditious and efficient development of a marginal field. “The company shall provide evidence of the ability and willingness to pay the offered signature bonus, if successful,” it added. The DPR had announced the start of the 2020 Marginal Field Bid Round for indigenous companies and investors interested in participating in the exploration and production business in the country. The DPR said consideration would be given for host community/state participation, as well as a commitment to social project and/or proposal aimed at the socioeconomic development of the populace in the host community/state. It said, “Pre-qualification will be open to all indigenous companies that are duly registered to carry out petroleum exploration and production operations in Nigeria. “Companies, including their promoters that are indebted to the government will not be pre-qualified. Also, companies and their promoters that currently have assets that are not being operated in a business-like manner will not be pre-qualified.”
Source: Business a.m.
NigeriaPPPRA backtracks, says cap remains, marketers can’t fix fuel price
In a clear reversal of its ‘Market Based Pricing Regime for Premium Motor Spirit (PMS) Regulations, 2020,’ released on 4 June 2020, which removed the price cap on fuel and which said the price would, henceforth, be determined by market forces, the Petroleum Products Pricing Regulatory Agency (PPPRA), yesterday, said it would not allow petroleum products, marketers, to fix the price of Premium Motor Spirit (PMS), also known as petrol. In a statement issued in Abuja, after calls for its scrapping by Nigerians since it would be redundant in a fully deregulated downstream sector, the PPPRA stated that its role in the determination of the monthly price for PMS would be advisory, while its price would serve as a guide to marketers in the sale of the commodity. Executive Secretary of the PPPRA, Abdulkadir Saidu disclosed that the ‘Market-Based Pricing Regime for Premium Motor Spirit (PMS) Regulations, 2020’, does not confer on marketers the power to fix prices for the product as they deem fit, but should rather, rely on guiding prices that would be advised by the PPPRA according to market realities.
NigeriaGreenwich invites investors to bid for a plant in Nigeria
A State in the South West of Nigeria seeks to divest the majority of its stake in an independent power plant (IPP or the plant). Closing date for submissions is 3pm (Nigerian time) on Monday, 22 June 2020. The plant was solely conceived and developed by the State and is 90% to completion. The development of the plant is part of the State’s efforts to support infrastructural development aimed at driving industrialisation within the State. Consequently, the State has engaged Greenwich Trust Limited (Greenwich) to act as its financial adviser in connection with the proposed sale of majority stake in the Plant. On behalf of the State, Greenwich is pleased to invite prospective investors (PIs) to formally submit an Expression of Interest (EOI) indicating their interest to bid for the sale. The proposed sale (the transaction) shall be by way of a competitive bidding process.
Source: ESI Africa
RwandaBamboo-to-toilet paper factory, to be constructed
Bamboo valuation is about to take on a whole new dimension in Rwanda. The authorities of this East African country want to build a large factory that will manufacture everyday products from bamboo. These include toilet paper, which is usually made from wood. The factory will also produce toothbrushes, clothes brushes, furniture and even some building materials. The Rwanda Water and Forestry Authority (RWFA) is in talks with several investors for the financing of this sustainable development project. “We need to plant seven species of bamboo suitable for the factory,” says Jean-Pierre Mugabo, RWFA director. According to Jean-Pierre Mugabo, the feasibility studies for the construction of the bamboo beneficiation plant have already been carried out, as well as its construction plan. The director of the Rwanda Water and Forestry Authority even plans to start work on the plant site by 2021. The bamboo processed at the plant will be cultivated in the Eastern Province on an area of 2,119 hectares. The development of this project is in line with the Rwandan government’s desire to develop bamboo as a viable alternative to deforestation.
Source: AFRIK 21
UgandaUganda Tax Appeals Tribunal rules on withholding tax due on accrued interest
On 26 May 2020, the Uganda Tax Appeals Tribunal (TAT) in the case of ATC Uganda Limited (ATC) vs Uganda Revenue Authority (URA) ruled on when an obligation for withholding tax arises and when an amount is deemed to be “paid”. The TAT ruling provides specific clarity regarding the interpretation of the term “paid” and, as a consequence, a withholding tax liability may arise in respect of various expenses previously regarded as not to be subject to withholding tax yet, on the basis that they had not been “paid”. Taxpayers should carefully consider the application of this ruling when incurring any expenses potentially subject to withholding tax.
UgandaUganda pushes back award of exploration licences
Uganda has pushed back the licensing round for five new oil blocks in the Albertine Graben to 30 September 2020, following low interest from exploration companies. Six companies had submitted expressions of interest proposals, but there were no detailed bids for the advertised oil blocks by the end of March 2020 as expected. The postponement will likely affect the scheduled opening of bids and award of licences according to both private and government officials. “The six were yet to submit their detailed proposals. Once we get all the bids in by September 30, we hope to award the licences by end of this year but more likely in January next year,” said Robert Kasande, the permanent secretary at Uganda’s Ministry of Energy and Mineral Development. Mr Kasande said the postponement was as a result of the COVID-19 pandemic that has shrunk economic activity, curtailed air travel and partly led to the global collapse of the crude oil prices, a situation that is likely to linger until the global economy rebounds. Mr Kasande said that the government was waiting for more international companies to make their applications before issuing invitation of detailed bids.
Source: The EastAfrican