30th September 2022 Trade and Financial Services Round Up

September 30, 2022 - 5 minutes read
Kenya

CBK raises key lending rate to 8.25pc to curb runaway inflation

The Central Bank Monetary Policy Committee has raised the base lending rate from to 7.5 per cent to 8.25 per cent, citing elevated pressure from inflation. The modest increase by 75 basis points effectively signals higher cost of loans for Kenyan borrowers. The move is also in line with the expectations of most analysts who had projected action by the MPC to stem surging inflation.

“The Committee noted the sustained inflationary pressures, the elevated global risks and their potential impact on the domestic economy and concluded that there was scope for a tightening of the monetary policy in order to further anchor inflation expectations. In view of these developments, the MPC decided to raise the Central Bank Rate (CBR) from 7.50 percent to 8.25 percent,” it said in a statement Thursday.

(Source: Nation Africa)

Ruto pledges wealth tax on tycoons to fix budget

President William Ruto has revived a proposal to impose higher taxes on Kenya’s super-rich and high-income earners, endorsing the introduction of a wealth tax that failed to sail through Parliament over the past four years. The idea is the latest in a long list of efforts to raise taxes on the super-rich as the new administration seeks to cut reliance on loans to fund the national budget amid the burgeoning public debt.

The President told Parliament in his inaugural speech on the floor of the House that his government will seek to raise taxes from the wealth accumulated by the richest Kenyans over getting revenues from workers and traders. This sort of tax would be based on a person’s net worth after deducting their liabilities and would only apply to the richest citizens.

Different from many other kinds of taxes such as income tax, people with sufficient networth would owe wealth taxes even if they failed to take any action, like earning income or selling assets. It would apply to all property such as real estate, cash, investments, business ownership and other assets, less any debts, and investors would owe the tax each year based on the market value of the assets.

(Source: Business Daily)

Tanzania

Tanzania launches Africa’s first $300 million smart economic zone

The newly launched Mkinga Economic Zone project is expected to take Tanzania’s intercontinental trade to new heights. The $300 million (about Sh700 billion) projects in Tanga Region, is expected to act as a gateway to over 18 landlocked countries in the region.

It is the first smart economic zones in Africa spanning on 650 acres leading the sustainable and economic development in Africa, featuring the world-class technologies like Artificial Intelligence (AI), E-commerce and digital business (virtual company), making it unique in the region.

(Source: The Citizen)

Uganda

NSSF total income declines by UgShs70b

The difficult economic environment and policy changes ate into National Social Security Fund (NSSF) income for the period ended 2021/22. 

During the year, according to results presented in Kampala yesterday, NSSF’s income declined from UgShs1.84 trillion in the 2020/21 financial years to UgShs1.77 trillion. 

While presenting the performance results during the 10th annual members’ general meeting, Mr Richard Byarugaba, the NSSF managing director, said despite a decline, earnings and investment income continued to be the biggest driver of assets growth as opposed to contributions.

(Source: The Monitor)

Rwanda

Private sector urged to expand market under AfCFTA trading

Players in the private sector have been encouraged to expand their market across the continent by leveraging the ongoing pilot phase of trading under the African Continental Free Trade Area (AfCFTA). So far, in line with the pilot phase of trading under the AfCFTA that was announced in July, just one Rwandan company has started exporting coffee to Ghana and more are expected to join, according to the Ministry of Trade and Industry.

The AfCFTA Initiative on Guided Trade involves other countries including; Cameroon, Egypt, Ghana, Kenya, Mauritius and Tanzania. Recently, a Kenyan company involved in battery manufacturing also exported its first batch of products to Ghana under the continental trade area framework, officials announced.

In a press briefing on September 29, trade minister, Jean Chrysostome Ngabitsinze, said that business people shouldn’t limit themselves to markets available in the neighboring countries but expand to other African countries. He however emphasized that it’s not just about jumping into trade, there are procedures that have to be adhered to and standards that should be met.

(Source: The New Times)

Ethiopia

Opening banking sector to foreign investors lures FDI, advances financial inclusion: Ethiopian Finance minister

The decision to open up the banking sector to foreign investors will help to attract Foreign Direct Investment (FDI), advance financial inclusion, and create service competitiveness, Finance Minister Ahmed Shide said. The Council of Ministers has recently passed a landmark decision to open the Ethiopian banking sector to foreign investors.  

In an exclusive interview with ENA, the finance minister said the National Bank of Ethiopia is working on the details of the regulatory aspect, which will be submitted to the Council of Ministers, and then to the parliament in the coming few months. Opening of the banking sector for foreign direct investment (FDI) is part of the Homegrown Economic Reform program that has been implemented, he added.

(Source: ena)

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