March 11, 2022 - 5 minutes read

11th March 2022 Trade & Financial Services Round Up

By Amrit Labhuram
KENYA

KRA signals peace with Keroche in Sh22bn row

The Kenya Revenue Authority (KRA) has signalled concessions for Keroche Breweries after day-long negotiations with the owners of the embattled firm on Thursday over a disputed Sh22.79 billion tax bill.

The taxman revealed that a deal was being hammered by Thursday evening to provide “an amicable road map” for settling the dispute.

“We have had day-long discussions and we have made good progress,” KRA Commissioner-General Githii Mburu told the Business Daily on the phone last evening.

Mr Mburu said further talks are expected to yield a deal, paving the way for Keroche to pay tax arrears under the negotiated agreement in exchange for the opening of the brewer’s factory.

Keroche has requested the KRA to grant it a grace period of 18 months to clear taxes in arrears while paying the current ones as they fall due.

It has also appealed to the KRA to allow the reopening of its plant in Naivasha to prevent huge losses and lift the agency notices with the 36 banks, which demanded the lenders wire cash from the Keroche accounts to the taxman’s bankers.

Keroche said it had over two million litres of beer worth about Sh512 million in its storage with a fixed maintenance cost of Sh30 million per month.

(Source: Business Daily)

KCB to lend Sh5bn in first big green loan financing

KCB Bank  will extend a Sh5 billion loan facility to an infrastructural sector firm in the country, being the first company to receive the green funds.

In 2020, the lender received accreditation from the United Nations Green Climate Fund (GCF) for on-lending to investments and projects with a positive impact on the environment such as reduced carbon emissions.

The bank listed on the Nairobi Securities Exchange said most of the applications so far are from infrastructure, agriculture and, building and construction sectors, however, failed to disclose the company’s name.

“The accreditation process is very long and rigorous. We are working with a number of clients going through the process. At the moment only one of whom has completed the technical assessment and we are looking to disburse this year,” said Rosalind Gichuru, KCB Group Director marketing and corporate affairs.

KCB Bank was the first lender in the country to receive the accreditation, supporting growth for its loan portfolio under green space lending space.

The bank was accredited under the medium to large private sector category, allowing it to front projects of between Sh5 billion and Sh25 billion, meaning a focus on corporate entities.

(Source: Business Daily) 

TANZANIA 

TIRA increases Agents countrywide  

In a quest to improve public awareness and uptake of insurance products, the Tanzania Insurance Regulatory Authority (TIRA) plans to increase the number of agents across the country. During a dinner event for women CEO’s in the insurance industry on International Women’s Day, TIRA’s deputy commissioner Khadija Issa Said talked about plans to improve the insurance sector’s contribution to the country’s economy. “We want to raise the sector’s performance in the economy to at least three percent from the current 0.57 percent,” she said.

Zonal licensing offices have been established in all parts of the country to create easy access to people who want to become agents of insurance products. 

(Source: The Citizen)

Tanzania prioritises special and economic export zones 

The government of Tanzania is focusing on developing Special Economic Zones (SEZ) and Export Processing Zones (EPZ) infrastructure as a way of attracting more investment into the industrial sector.  Tanzania’s Investment, Industry and Trade Minister mentioned that the government is finalising procedures to ensure the One Stop Centre will serve investors efficiently. The government has already established nine ministries with three ministries yet to be established. Upon completion of the SEZ and EPZ, an investor will be able to get the necessary permits within 24 hours. 

One of the 36 Memoranda of Understanding (MoU) signed at the Dubai Expo 2020 recently was investing in SEZ and EPZ. Benjamin William Mkapa Special Economic Zone has all infrastructures complete. The ministry has prioritised on completing the Bagamoyo and Kurasini SEZs. 

(Source: The Citizen)

UGANDA

Uganda’s equity markets ranked best among EAC countries

The Absa Group Africa Financial Markets Index 2021 has ranked Uganda as the best performer in equity markets among EAC member states.

The index, which measures performance of financial markets using six pillars, ranks Uganda with a score of 57 compared to Kenya, which scored 47 and Tanzania (45). Rwanda scored 43 while Ethiopia scored 25.

The score, however, ranks Uganda in fifth position among 23 Africa countries, which was an improvement from the tenth position last year. 

Malawi, Egypt and Uganda were among the countries that improved most due to advancements in enforceability of global contractual frameworks.

Ghana and Uganda entered the top five for the first time both earning points for progress in enforceability of standard master agreement.

Bank of Uganda Deputy Governor Michael Atingi-Ego, said ranking should galvanize Uganda to sustain good policies and interventions as well as undertake strategies that will unleash the power of the financial market to drive economic growth and socio-economic transformation.

(Source: Daily Monitor)

Data, Fintech fastest growing revenue sources for telecoms 

Data contained in the MTN financial results for the period ended December 2021 indicate that telecom registered a 21.9 percent growth in data revenues, while Fintechs services, which include digital payments, registered a 10.2 percent growth, driven by mobile money services. 

The growth, MTN said, was underpinned on improvements in broadband connectivity and growth in active data users, which saw a 16 percent growth in active data users while total MBs used increased by 47 percent.   MTN also reported that during the period, data users increased by 730,000 subscribers from 4.59 million to 5.32 million, representing a percentage growth on 15.96 percent. 

Revenues from MTN’s Fintechs grew by 10.2 percent, largely driven by mobile money services which registered a 16.3 percent growth. 

Mobile money has in the last 10 years become one of the most important revenue streams for telecoms. Currently, according to UCC, there are over 30 million mobile money subscribers. 

The rapid changes in technology have, however, eaten into traditional revenue streams – voice and messaging services – which had for long been some of the largest contributors on telecom’s topline. 

(Source: Daily Monitor)

RWANDA

The inflation rate reached 5.8% in February 2022

A report released by the National Bureau of Statistics on Wednesday shows that market price volatility has reached 5.8% in February this year compared to 4.3% in the same period last year.

Consumer protection analysts say some of the traders will raise prices at will and become a burden on consumers.

Prices for food and non-alcoholic beverages rose by 7.9%, transportation by 4.8% and prices for fuel, gas and water by 4.5%.

Compared to January and February 2022, prices increased by 1.8%. Traders say they believe the opening of the border could lead to higher prices and lower prices.

Rural market prices also rose sharply as they reached 3.1% in February 2022, while in January 2021 it was 0.8% below zero.

Rwanda mulls VAT levy on Netflix, other digital firms

Rwanda is considering collecting Value Added Tax (VAT) on online services consumed within the country.

According to information from the Rwanda Revenue Authority (RRA), the proposal is currently in the Ministry of Finance and Economic Planning from where it will undergo several procedures before it can start to be implemented.

The concept of applying VAT on these services is one that is rapidly being adopted around the world with many countries in the West already doing it, while African countries are lately making efforts to jump onto the bandwagon.

Speaking to this New Times, Jean-Louis Kaliningondo, the Deputy Commissioner General of RRA, told us why the move is a necessary one:

“When you pay for services such as Netflix, you are using money that you have generated in Rwanda. So, we are asking, why don’t we collect VAT on these services yet they are being paid for by our citizens. If you pay 12 dollars a month for Netflix, why don’t we keep some of that amount at the source here?” he said.

Kaliningondo said that before Rwanda implements this move in its taxation system, one of the procedures that must be undertaken is an impact assessment to know what would be its effect.

Here, for example, they want to find out whether the VAT will not become a hindrance to the penetration of these services in the country.

(Source: New Times) 

ETHIOPIA

Ethiopia, KOICA ink $20m Grant Agreement

Ethiopia and KOICA (the Korea International Cooperation Agency) have inked a $20 million grant agreement for enhancing social and economic productivity via two projects, in line with the Sustainable Development Goals’ (SDGs’) 10-year perspective plan.

The first project aims to enhance the leather sector’s competitiveness in Ethiopia by starting a business incubation centre for small and medium enterprises involved in leather works. It is hoped that this will better the chances of the SMEs in leather export, as well as in establishing business linkages.

The other project targets supporting community-led solutions for inclusive socio-economic resilience towards sustainable peace in conflict-affected areas. It is said this project will have a role to play in cementing social cohesion, as well as economic resilience in affected communities through the area-based and community-based peacebuilding and recovery processes and increased access to sustainable livelihoods.

Signing the agreement were Semereta Sewasew, Ethiopia’s State Minister of Finance and Lee Byunghwa, Country Director of KOICA Ethiopia Office.

(Source: 2merkato)

Ethiopian Airlines Enters Partnership Deal with IDIPO and Air Djibouti for Sea-Air Transport

Ethiopian Airlines announced it has signed a strategic partnership agreement to jointly commence sea-air multimodal transportation with International Djibouti Industrial Park Operation (IDIPO) and Air Djibouti for expeditious transportation of goods to Africa.

Based on the agreement, the cargo will be transported from China to Djibouti Free Zone by sea and will be uplifted by air from Djibouti International Airport, Ethiopia said in a statement sent to 2merkato.com. The synergy between air and sea transportation is highly instrumental in facilitating trade between Africa and China through fast and easy movement of cargo, the carrier noted.

The collaboration will save both time and energy in addition to stimulating the growth of the cargo market in Africa. The transportation deal enables traders to order their products from China to Africa via Djibouti port and Ethiopian facilitates the air movement of goods to different parts of Africa through its vast network.

The partnership simplifies trade from China to different countries in Africa with the vast Ethiopian network in the continent and beyond, according to Ethiopian Airlines. The markets of China and Africa are highly complementary and the partnership has huge potential in facilitating cost and time-efficient logistics solutions for African traders.

(Source: 2merkato)

SUDAN 

Sudan faces economic decline as Pound dips further

The Central Bank of Sudan stopped issuing the indicative price after announcing the unification of the Sudanese Pound exchange rate, allowing the determination of currency exchange rates without interference from the Central Bank. Sudan is forecasted to suffer a steep economic decline without sufficient reserves.

The price for the US Dollar jumped to SDG580 on the parallel market on Wednesday, while it ranged in banks between SDG530 and SDG560; up from yesterday’s exchange rate at SDG570.

Economist Hasan Bashir said in an interview with Sudan Today in Radio Dabanga that the full liberalisation of the exchange rate under the absence of enough foreign exchange reserve will lead to the continued rise in foreign exchange rates in the parallel market and explained that banks will remain in a continuous state of chasing the parallel market rates.

Bashir also said the resolution could be addressed as part of short-term implications but was not a sustainable solution. He said the aftermath of the October 25 military coup exacerbated the economic crisis and cut off the road to economic growth in Sudan this year, which already took a full year to start to recover and take off the Sudanese economy.

(Source: Radio Dabanga)

SOMALIA

Somali Government Seeks New Support From Arab League

The Minister of Foreign Affairs and International Cooperation of the Federal Government of Somalia, Abdisaid Muse Ali, met with the Secretary General of the Arab League, Ahmed Aboul Gheit, at the Arab League Headquarters in Cairo.

The meeting between the two officials was attended by Ambassador Ilyas Sheikh Omar, Ambassador of the Federal Republic of Somalia to Egypt and Permanent Representative of the Arab League.

The meeting discussed a number of key issues and ways in which Arab countries can support Somalia in addressing the severe drought situation in the country as well as the ongoing elections.

The Minister of Foreign Affairs and International Cooperation and his accompanying delegation will attend the 157th Ordinary Arab Foreign Ministers’ Meeting in Cairo on Wednesday.

(Source: Radio Dalsan) 

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