issue 411 | 01 Aug 2021
AngolaGovernment hikes fuel export taxes
The Angolan government will change the export rates and surcharges for oil derivatives, to mitigate the negative impact of illegal fuel exports on the economy and the subsidy that these derivatives benefit from in Angola. The Legislative Authorisation Bill that authorises the president of the Republic of Angola as holder of the executive power, to legislate on fiscal matters for the Alteration of Fuel Export Duties was unanimously approved on 22 July in Parliament. With the approval of the document, the government will, from now on, tax the exportation of diesel, gasoline and illuminant oil, with the application of taxes to the public sale price. The secretary of state for Oil and Gas, José Alexandre Barroso, said in the chamber that fuel smuggling was made worse by the difference in prices of oil products in Angola, compared to other countries in the region. As an example he said that a litre of petrol in Angola was sold at AOA160 Kwanzas, while in neighbouring countries the price ranged from AOA450 to AOA800 per litre. In turn, a litre of diesel sold at petrol stations in the country at AOA135, is sold at over AOA450 in Angola's neighbouring countries. He said that the government proposed applying a customs duty rate of 135%, a risk rate of 95% and a service charge of 0.5%.
BotswanaBotswana signs first two solar PV power purchase agreements
Sub-Saharan Africa-focused Independent Power Producer (IPP) Sturdee Energy has signed two power purchase agreements with the Botswana Power Corporation (BPC) for the country’s first two solar photovoltaic (PV) IPP projects. A 3 megawatt (MW) (AC) solar PV project will be created in Bobonong in the central district of Botswana and a 1 MW project will be built in Shakawe in the northwest of the country. Under the executed power purchase agreements (PPAs), Sturdee Energy will sell electricity to BPC for 25 years. The projects are expected to produce more than 10,000 MW in their first year of operation. David Kgoboko, BPC CEO, said: “The signing of the two PPAs marks a major milestone for the adoption of renewable energy in Botswana’s new energy mix and increases energy security for our country in an environmentally sustainable manner. “The two solar PV projects mark the beginning of the rollout of twelve grid-tied solar PV projects which are scheduled for completion by end of 2022. When realised, these projects will contribute a total of 35 MW of clean energy to our grid.”
Source: ESI Africa
BotswanaGovernment in talks for USD600-million debt from international lenders
The Ministry of Finance and Economic Development is in talks with international lenders for a USD600-million (BWP6.7-billion) loan intended to finance and support projects under the National Development Plan 11, with plans to tap into the funds before the end of the year. A Request for Financing Proposal (RFP), which was sent to international commercial banks has reportedly elicited interest and talks are ongoing, according to information provided to BusinessWeek. “Any firm proposals for borrowing will be presented to parliament for approval as per the Public Finance Management Act,” Finance and Economic Development minister, Peggy Serame told BusinessWeek. She explained that the proposed facility would be guaranteed by the Multilateral Investment Guarantee Agency (MIGA), a World Bank institution that offers political risk insurance and credit enhancement guarantees. “The RFP was closed in January 2021, which was sent to international commercial banks to source funding. “This is a facility which will be guaranteed by MIGA and therefore assist in extending tenor and possibly lower the cost of borrowing,” said minister Serame.
The Gambia / Sierra LeoneThe Gambia, Sierra Leone sign joint commission to boost economic cooperation
The minister of Foreign Affairs, International Cooperation and Gambians Abroad, Dr Mamadou Tangara, recently signed a Joint Commission with the Internal Affairs minister of the Republic of Sierra Leone, Mr David Panda Noah, at his office in Banjul. The signed Joint Commission is meant to strengthen cooperation between the two countries in the areas of economic development, trade and investment policies, financial services, information and intelligence sharing, education, health, tourism and culture, infrastructure development, security and military, agriculture, agro-processing, forestry and livestock development, fisheries and maritime resources, science, technology and innovation, youth and sports, local government and issues of traditional leaders, migration and settlement of the nationals of the two countries. Prior to the signing of the Joint Commission, minister Tangara welcomed the Sierra Leonean delegation to the country and assured them of the commitment of President Adama Barrow and his counterpart President Julius Maada Bio in developing their countries. He said the Sierra Leonean delegation's coming to The Gambia was an indication of the excellent bilateral ties between Banjul and Freetown.
Source: The Point
GhanaADB maintains post-GAT turnaround with profit up 80% in H1
After years of underperformance, the Agricultural Development Bank (ADB) appears to have turned the corner permanently – with its unaudited half-year results showing post-tax profit growing by some 80%. The bank recorded GHS55.73-million for the first half (H1) of the year against GHS30.96-million in a comparable period last year. This follows a similar impressive performance from the state-owned bank in the thick of the unforgiving operating environment of 2020, owing to the advent of the Coronavirus (COVID-19), when the bank saw its profit after tax (PAT) grow by 341% year-on-year from GHS14.82-million to GHS65.41-million. The bank’s turnaround follows an injection of GHS127-million by the Ghana Amalgamated Trust, a special purpose vehicle (SPV) that was established by the state in 2019 to support solvent and well-run indigenous banks, which were otherwise having difficulties in meeting the new minimum capital requirement [GHS400-million] deadline, in meeting their obligations. This, in addition to a successful listing of the lender on the Ghana Stock Exchange in 2016, has been credited for the change in the bank’s fortunes.
KenyaKenya’s central bank holds policy rate at 7%
Kenya’s central bank has retained the benchmark lending rates to commercial banks at 7% for the 10th consecutive time to support the recovery of an economy battered by the COVID-19 pandemic and surging inflationary pressures triggered by high food and fuel prices. The banking regulator’s unchanged Central Bank Rate (CBR) is designed to allow increased spending by households and businesses to boost economic activities in the country. The bank’s Monetary Policy Committee (MPC) which met on Wednesday, 28 July, noted that the economy has persistently operated below its potential level, with private sector businesses being more concerned about continuing uncertainties over the pandemic, increased taxes, and heightened political activity. “The MPC will closely monitor the impact of the policy measures, as well as developments in the global and domestic economy, and stands ready to take additional measures as necessary,” governor Patrick Njoroge, who also doubles as the chairman of the MPC said in a statement on Wednesday, 28 July. The country’s overall inflation for the month of June increased to 6.3% from 5.9% in May, largely due to increases in food and fuel prices.
Source: The EastAfrican
Kenya / South SudanKenya, South Sudan abolish visa requirement for their nationals
Kenya and South Sudan on Monday, 26 July, announced an end to visa requirements for their nationals visiting the two countries in the latest move to boost integration. The decision means South Sudanese travelling to Kenya will be entitled to enter for free, as long as they carry a valid passport and meet other health conditions for travellers. In return, Kenyans will no longer need to apply and pay for South Sudanese visas online before travel. Kenya’s Foreign Affairs principal secretary Macharia Kamau said the move was in line with existing integration protocol at the East African Community (EAC). “This waiver of visa requirement for citizens of the Republic of South Sudan takes effect immediately from the date of this press release,” Kamau said in a statement on Monday, 26 July. The countries said the move is in line with the treaty establishing the EAC’s Common Market Protocol, an agreement providing for the free movement of labour and people from the member states. The next step, Kamau said, will be to sign a labour agreement which will give specified privileges for expatriates. The waiver of the visa fees, nonetheless, gives an opportunity for Kenyans to seek work in South Sudan as is provided for under the Common Market Protocol.
Source: The EastAfrican
Kenya / United KingdomKenya, UK to digitise trade after signing the EPA agreement
Kenyan vegetable and cut flower producers are set to access the British market more efficiently and cheaply, following a plan to eliminate paperwork in trade between the two countries with long-standing historical ties. The plan, which is still under discussion, is set to make Kenyan exports to the United Kingdom (UK) market more competitive, the two countries signed an Economic Partnership Agreement (EPA) in London in December 2020, ensuring continuity of their trade relations after the British government voted to exit the European Union (EU). The Kenya-UK EPA allows Kenyan products unfettered access to the British market, free of duty and quota restrictions. On Monday, 26 July, Kenyan-based non-profit organisation TradeMark East Africa, and the UK-based Institute of Export and International Trade, signed a memorandum of understanding providing a framework for collaboration in the implementation of a digital trade corridor between the UK and Kenya. The Agreement, which was signed in London, provides for the implementation of the UK-Kenya Trade Logistics Information Pipeline (TLIP), which aims to eliminate paperwork and introduce much better visibility up and down supply chains that flow between the two countries.
Source: The EastAfrican
Lesotho / MauritiusLesotho seals new treaty with Mauritius, hoping to curb tax dodging
Lesotho has finalised a new tax treaty with Mauritius, alleviating fears in the Southern African nation that multinational corporations were dodging taxes through shell companies. The new agreement, which sets out the taxation rules for companies that run Lesotho businesses from Mauritius, came into effect in early July 2021. It replaces a 1997 treaty that, in recent years, the Lesotho authorities complained was unfair. “The process for renegotiating the treaty was initiated by Lesotho in recognition that the old treaty was compromising Lesotho’s interests and because some of the key elements of a modern tax treaty were missing,” according to a brief provided to ICIJ by the Lesotho Revenue Authority. For decades, some of Mauritius’ most potent tools in its arsenal as a tax haven were bilateral agreements signed with neighbouring African nations. While the intention of such treaties is generally to ensure companies do not pay taxes twice on the same pool of money, savvy firms took advantage of Mauritius’ tax rate - often as low as 0% - to instead pay little or no tax at all. The new treaty also introduces fees for technical services and allows Lesotho to request additional information from Mauritius about the revenue and taxes of companies with operations in Lesotho.
Source: International Consortium of Investigative Journalists
MadagascarRio Tinto to power mine through renewable energy
Rio Tinto has signed a power purchase agreement for a renewable energy plant to power QIT Madagascar Minerals (QMM) ilmenite mine. The mine is a joint venture between Rio Tinto (80%) and the government of Madagascar (20%). The project is part of a broader initiative to reduce the ilmenite mine’s environmental footprint. Initiatives include programmes that focus on emissions reduction, waste and water management, carbon sequestration, ecological restoration and reforestation. This project, which uses solar and wind energy, will significantly contribute to Rio Tinto’s operations in Madagascar achieving its carbon neutral objective by 2023. The renewable energy plant, to be built, owned and operated by Independent Power Producer, CrossBoundary Energy (CBE), over a 20-year period, will consist of an 8 megawatt (MW) solar facility and a 12 MW wind energy facility to power mining and processing operations. There will also be a lithium-ion battery energy storage system of up to 8.25 MW as reserve capacity to ensure a stable and reliable network.
Source: ESI Africa
MauritiusMauritius becomes first African country to launch CISI professional anti-money laundering digital learning solution
The Chartered Institute for Securities & Investment (CISI) and Mauritius Finance (MF) have announced a key project in Mauritius to support the country’s compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) requirements alongside another project aiming to increase practitioner knowledge on integrity and ethical decision making. The not-for-profit global membership body, the CISI, and MF, the flagship organisation representing operators of the Financial Services Industry, have partnered to create an online cost-effective AML/CFT professional assessment to support licensees of the Financial Services Commission (FSC) and other regulatory bodies in Mauritius in meeting their training mandates. Under the 2018 Financial Intelligence and Anti-Money Laundering Act (FIAMLA) and FIAMLA Regulations, financial institutions are required to provide annual AML/CFT training to all employees and this course comes at the right time to meet members’ needs accordingly.
Source: Africa Business Communities
NigeriaCBN to refund licensing fees of new BDC promoters
The Central Bank of Nigeria (CBN) has commenced the process of refunding licensing fees and capital deposits to promoters of bureau de change (BDC), whose registrations were being processed before an announcement on Tuesday, 27 July. The apex bank had, on Tuesday, announced the suspension of the funding of BDCs and registration of new ones, accusing them of money laundering and other anti-market activities. In a circular on 29 July, the apex bank said it “will commence the immediate refund of capital deposits and licensing fees (where applicable) to promoters who have pending bureau de change (BDC) licence applications with the CBN”. The regulator, thus, called on affected parties to file requests for the refund through the Director of Financial Policy and Regulation Department. It also directed banks to “henceforth stop accepting instruction from customers to transfer the capital deposit of NGN35-million to the designated CBN account for the purpose of applying for a BDC licence”.
Source: The Guardian
NigeriaIMF retains 2.5% growth estimate for Nigeria
The International Monetary Fund (IMF) has retained Nigeria’s 2.5% economic growth forecast for 2021. The institution said this in its World Economic Outlook (WEO) for July titled ‘Fault Lines Widen in the Global Recovery’ released on Tuesday, 27 July in Washington DC. According to the IMF, the slow rollout of COVID-19 vaccines was the main factor weighing on the recovery for Low-Income Developing Countries (LIDCs) which Nigeria is a part of. It also retained its 6% growth forecast for the global economy for 2021 and 4.9% in 2022, adding that though the global forecast was unchanged from the April 2021 WEO, there were offsetting revisions. The IMF had at its 2021 Virtual Spring Meetings in April, projected a 2.5% growth for Nigeria’s economy in 2021, up from 1.5% it projected in January. The IMF said that in LIDCs, the overall fiscal deficit in 2021 was revised up by 0.3% percentage points from the April 2021 WEO, mainly because of the re-emergence of fuel subsidies as well as the additional COVID-19 and security-related support in Nigeria.
Source: Daily Trust
Nigeria / CameroonNigeria, Cameroon border bridge will facilitate free trade – Fashola
The minister of Works and Housing, Mr Babatunde Fashola has said the construction of a new double-lane bridge on the border between Nigeria and Cameroon will facilitate free trade. Fashola said this on Monday, 26 July while inspecting the newly constructed 1.5 kilometre (km), two-lane bridge on the border between Nigeria and Cameroon in Ekot-Mfum, Etung local government area of Cross River. The News Agency of Nigeria (NAN) reports that construction of the bridge began on 28 April 2017 and was completed in March 2021 at the cost of USD35.9-billion. Funding of the project was provided by both countries. According to the minister, the construction of the bridge will also strengthen relations between both countries and improve cross-border security. “This is the first shoot of the harvest of completed projects proposed as the administration enters the second phase of the second term on its way out,” he said. Fashola said the administration’s plan to renew and expand old infrastructure would take the two countries to the future for many more decades and strengthen the relationship between them.
RwandaPartnership with private sector is key in closing Rwanda’s infrastructure gap
The COVID-19 pandemic has pushed the Rwandan economy into recession in 2020 for the first time since 1994, according to the World Bank’s latest Rwanda Economic Update. The 17th edition of the Rwanda Economic Update: ‘The Role of the Private Sector in Closing the Infrastructure Gap’, says that the economy shrank by 3.7% in 2020, as measures implemented to limit the spread of COVID-19 and ease pressures on health systems brought economic activity to a near standstill in many sectors. Although the economy is set to recover in 2021, the report notes the growth is projected to remain below the pre-pandemic average through 2023. Declining economic activity has also reduced the government’s ability to collect revenue amid increased fiscal needs, worsening the fiscal situation. Public debt reached 71% of gross domestic product (GDP) in 2020, and is projected to peak at 84% of GDP in 2023. Against this backdrop, the report underlines the importance of the government’s commitment to implement a fiscal consolidation plan once the crisis abates to reduce the country’s vulnerability to external shocks and liquidity pressures.
Source: World Bank
TanzaniaTanzania strategises to up trade through AGOA
Tanzania has expressed its commitment to pulling up its socks in undertaking a number of measures in an effort to boost export to the United States (US) under the African Growth and Opportunity Act (AGOA). As envisioned in the National AGOA Strategy 2016, the measures according to the Industry and Trade Ministry, include: cutting operational costs to spar production, building a Tanzania-US traders network, and improving the business environment through the blueprint which sets a stage for a raft of amendments to policy and regulatory reforms. The list also includes establishment of the trade information module which kicked off in July and establishment of Sanitary and Phytosanitary Measures especially for agricultural products. Several Tanzanian products, notably clothing, leather, agricultural and forestry products are big beneficiaries of the preferential AGOA arrangements, which has lifted import duty on all eligible products and granted preferential market access upon compliance with rules of origin.
Source: The Citizen
TanzaniaTelecoms happy with the levy review
Mobile phone operators are happy with a recent decision by the government to review its new levy on mobile money transactions. In an effort to raise revenue by TZS1.254-trillion budget for the 2021/22 financial year, the government in June, amended the Electronic and Postal Communication Act (Cap. 306) by imposing a levy of between TZS10 and TZS10,000 on mobile money transactions, depending on the amount sent and withdrawn. A calculation of the charges indicates that, for example, sending TZS1-million to someone and withdrawing same at destination costs TZS31,000 in the current and new charges in total. Tanzanians believe the amount being deducted was just too high for them to carry and that it was going against the country’s financial inclusion agenda. In reaction to the public outcry, the Finance and Planning minister, Dr Mwigulu Nchemba said recently that President Samia Suluhu Hassan has directed her lieutenants to review the levy. Recently, Treasury permanent secretary Emmanuel Tutuba told The Citizen that working on directives from Prime Minister Kassim Majaliwa, the government has formed a team of experts that would review the mobile money levy and come up with recommendations.
Source: The Citizen
UgandaGold sustaining exports growth, says Finance Ministry
Uganda’s earnings from commodity exports increased by 6.7%, growing to USD455.2-million in May from USD426.5-million in April. According to the Ministry of Finance’s Monthly Performance of the Economy report for June, the growth was due to higher receipts from mainly non-coffee exports, among them mineral products, electricity, tea and beans. Gold, a key component in the mineral exports category, has become a major revenue earner for Uganda, making up at least 44% of export receipts. According to the report, the Middle East remained Uganda’s top export destination during the period, accounting for 42.7% of total exports. However, this was a slight decline compared to 44.3% in May 2020. Other major export destinations included the East African Community (EAC) with 25.6%, the rest of Africa (13.64%) and the European Union (11.62%). However, the merchandise trade deficit widened by 50% on a month-on-month basis from USD269.2-million in April to USD322.1-million in May. This was mainly on account of an increase in the import bill, which more than offset the growth in export receipts over the same period. Asia remained the main source of Uganda’s imports, increasing its share from 32% a year ago to 35.3% in May. The EAC and Middle East came in second and third, respectively accounting for 28.5% and 11.8%.
Source: Daily Monitor
ZimbabweGovernment to stimulate manufacturing diversification
The government's 2022 financial plan will carry measures aimed at diversifying Zimbabwe's production structure as authorities target a dynamic economic development, Finance and Economic Development minister Professor Mthuli Ncube has said. The local economy has for far too long been skewed towards the primary industries of agriculture and mining, which has meant that the country has been exporting mostly primary commodities. This dependency on primary commodities makes the country extremely vulnerable to the vagaries of the global market. And the coming into play of the African Continental Free Trade Area (AfCFTA) has provided an additional incentive for local manufacturers to up their game. Minister Ncube said value addition and diversification are key elements of the upcoming financial plan. "The export of raw commodities from minerals (such as gold and platinum) and crops (tobacco) with little value addition constrain economic growth and foreign currency receipts as well as undermine socio-economic development of the country. To support drivers of growth, there is need for more value addition on all primary products across all sectors in the country,” said the minister while presenting the 2022 Budget Strategy Paper.
Source: The Herald
ZimbabweZimbabwe opens borders for vaccinated tourists
Tourists that have received the COVID-19 vaccine are now exempt from Zimbabwe’s closure of the border with Zambia. This follows the Zimbabwean government opening the Victoria Falls and Kazungula border posts for such visitors. The government has thus acceded to the request by the Tourism Business Council of Zimbabwe (TBCZ). Wengayi Nhau, the TBCZ president, said the country could adopt a “new normal approach” that includes incentivising vaccinated citizens by allowing them to travel as well as to open the two borders to save the tourism industry from collapse. Many tourism companies were contemplating further laying off workers and closing because of lack of business in an industry hardest hit by COVID-19 because of international and local travel restrictions. In a post-cabinet briefing, Information minister, Monica Mutsvangwa, said the government considered that over 60% of Victoria Falls residents had been vaccinated, hence government eased restrictions on the borders. “Cabinet has acceded to a request by the tourism industry to open the Victoria Falls and Kazungula Border Posts to tourists who are fully vaccinated,” she said. Mutsvangwa, however, said the Level 4 lockdown measures remain in place.
Source: CAJ News Africa