8th July 2022 Trade & Financial Services Round Up

July 8, 2022 - 5 minutes read

Safaricom Ethiopia to start operations next month

The Safaricom-led consortium aims to start operations in Ethiopia next month but will stagger the rollout of the telecommunication services across various Ethiopian cities until next year. The Safaricom consortium, which also includes British development finance agency CDC Group and Japan’s Sumitomo Corporation, won the license with a bid of $850 million (Sh97.9 billion) last year. It had been tipped to launch commercial services on April 9, 2022, but this was delayed due to unexplained reasons. The first beneficiaries of the telecommunication services launch will be Dire Dawa – a city in eastern Ethiopia near the Oromia and Somali Region border.

(Source: Business Daily)

Fuel, LPG face more taxes under new policy

The National Treasury is seeking to set the minimum Value-Added Tax (VAT) rate at 12 percent, setting the stage for an increase in taxes on goods such as fuel and cooking gas if the proposal is adopted. The draft National Tax Policy proposes that all goods should be taxed at 16 percent and the preferential rate should not be lower than 12 percent. The Policy wants tax laws reviewed once every five years to make the taxation regime predictable and make the country an attractive investment destination.

Presently, taxes are reviewed annually through the Finance Act amid protests from business people on frequent changes. In the draft Policy, Kenya’s tax policies are spread across various tax laws, which are amended every year during the national budget process. Frequent changes in tax laws cause unpredictability and inefficiency in tax administration. This creates distortions, which impose additional costs to taxpayers and the Revenue Administration.

(Source: Business Daily)


Kenyan banks struggling to grow in Tanzania

Kenyan banks are struggling for market share in Tanzania despite a decade-plus presence in the country, underlining the challenges Kenyan businesses face in that market.

Equity Group, KCB and DTB hold a market share of less than four percent each in Tanzania, in contrast to shares of between five and 24 percent in other jurisdictions such as Uganda and the Democratic Republic of Congo (DRC). Equity, which is the biggest lender in Kenya by assets and earnings and is in the top three in Rwanda and DRC, says in its latest annual report that it held a market share of just 1.7 percent in the Tanzanian market by the end of 2020.

KCB’s Tanzania market share in the period stood at 2.1 percent, and DTB’s at 3.8 percent.

Equity’s Tanzania unit has in the past suffered under the weight of high non-performing loans. It was also negatively affected by the Covid-19 pandemic and the government’s decision to shift to Dodoma from Dar es Salaam, where most of the bank’s branches are situated, which resulted in a loss of State-related business.

(Source: The Citizen)


Museveni seeks barter trade with Iran government

President Museveni has proposed barter trade—the exchange of goods for goods and services for services—that would bypass the global banking system, which predominantly uses the United States Dollar as one of the ways of boosting trade with sanctions-hit Iran. The President mooted the proposal on Wednesday during a meeting at State House, Entebbe, with the visiting Iranian Deputy Foreign Minister for Economic Diplomacy, Dr. Mahdi Safari.

“For the general pharmaceuticals, we are ready to work with you in joint ventures for any medicine. The same with the vaccine,” Mr. Museveni was quoted as saying in a statement. On trade, according to the statement, the President said Uganda has got a lot of production of goods, including fresh products, which Iran might be interested in, and the two countries can exchange them in barter trade without going through the dollar.

The Iranian government uses, among others, barter trade with friendly countries in Asia and Latin America to skirt around the thick layers of the US-led sanctions, especially after former US President Donald Trump’s withdrawal from the Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA) in 2018. The Western countries also punish any companies, individuals or governments that deal in sanctioned commodities or individuals.

(Source: The Monitor)


Prime Minister Hamza Abdi Barre meets with Ethiopian Ambassador to Somalia Abdifatah Abdullahi

Prime Minister Hamza Abdi Barre has on Thursday received in his office Ethiopian Ambassador to Somalia, Abdifatah Abdullahi. The PM and the Ambassador discussed strengthening the relations and cooperation between the two nations. Abdullahi congratulated Barre for being appointed as the new Prime Minister of Somalia and wished him success as he embarks on his journey of serving the Horn of Africa Nation. He also reaffirmed Ethiopia’s government commitment to fostering and strengthening the diplomatic relations between the two brotherly countries.

The PM on his part thanked the Ethiopian government for its continued cooperation and support to Somalia in different sectors. Ethiopia is among government whose soldiers serve in the African Transition Mission in Somalia (ATMIS) and have also provided support to the East African Nation in different areas. Somalia and Ethiopia enjoy good diplomatic relations from 2017 since former President Mohamed Abdullahi Farmaajo came to power.

(Source: Radio Dalsan)

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