14th January 2022 Political & Regulatory Round Up

KENYA

OKA principals snub Uhuru, Raila meeting with pro-handshake MPs

One Kenya Alliance (OKA) principals yesterday skipped a luncheon organised by President Uhuru Kenyatta and ODM leader Raila Odinga, reportedly scuttling the agenda of the State House meeting.

The Standard has established that OKA principals Kalonzo Musyoka (Wiper), Musalia Mudavadi (ANC) and Ford Kenya’s Moses Wetangula had been invited.

Their absence reportedly forced Uhuru and Raila to confine their deliberations to parliamentary issues, with sources indicating that there were deliberate attempts to curtail discussions around the August 9 election.

An MP from Mt. Kenya said the luncheon was mooted during Raila’s birthday party at his Karen home in Nairobi. MPs who attended the night party reportedly requested the President to host Azimio loyalists to thank them for pushing through the Political Parties (Amendment) Bill, 2021.

Raila commended the MPs for passing the Bill and urged the Senate to endorse it as well.

(Source: The Standard)

UGANDA

Schools reopen in Uganda after nearly-two-year COVID closure 

Uganda has ended the world’s longest school closure, ordering millions of students back to the classroom after a gap of nearly two years.

Some 15 million pupils have not attended school in Uganda since March 2020 when classrooms were shuttered as COVID-19 swept the world.

Education Minister John Muyingo said all students would automatically resume classes a year above where they left off.

Child rights groups had criticised Uganda’s decision to keep schools fully or partially shut for 83 weeks, longer than anywhere else in the world.

During the pandemic, many school-aged boys entered the child labour market to work in mining, street vending and sugarcane planting.

According to the National Planning Authority (NPA), up to 30 percent of students are expected to not return to their school desks due to teen pregnancy, early marriage and child labour.

(Source: Aljazeera)

TANZANIA

Chenge spices up the race to replace Ndugai 

The race to succeed Job Ndugai as Speaker of the National Assembly took an interesting twist yesterday when former Attorney-General and Bariadi West legislator Andrew Chenge joined the fray.

Mr Chenge – who holds a Master’s degree in Law (LLM) from Harvard University, and a Bachelor’s degree in Law from the University of Dar es Salaam – is among several CCM cadres who were rumoured as aspiring to succeed Mr Ndugai. The Speaker abruptly resigned last week amid piling pressure from the ruling party loyalists following his remarks on government borrowing.

Mr Chenge, who worked as Attorney-General between 1993 and 2005, and as Minister for Infrastructure and East African Cooperation thereafter, is expected to give other key contestants a run for their money.

Other aspirants for the post of House Speaker who have already picked nomination forms are Sofia Simba, Goodluck Ole-Medeye, Joseph Msukuma, Merikion Ndofi, Godwin Kunambi, Abwene Kajula and Steven Massele.

(Source: The Citizen)

RWANDA

Rwanda fully vaccinates close to half its population against Covid-19

A month after an aggressive Covid-19 vaccination campaign was launched in November, almost six million people in Rwanda out of its 12.9 million population are fully vaccinated. The target is to reach 9.1 million people by June this year.

The countrywide vaccination campaign was launched after the country recorded six cases of the new Omicron variant in early December.

Rwanda currently adheres to a 10pm- 4am curfew that allows businesses to operate until 9pm, except for bars that have to close at 8pm.

Employees are encouraged to work from home, while gatherings and festivities are prohibited except for a limited number of fully vaccinated people who present negative Covid test results.

The rules have been in place since mid-December.

Rwanda has affirmed it has sufficient numbers of Covid-19 vaccines to inoculate the remaining three million target population.

(Source: The East African)

ETHIOPIA

Drone strike kills 17 on day Biden calls Ethiopia’s leader to urge peace 

On the same day that President Biden spoke with his Ethiopian counterpart, Abiy Ahmed, about a possible window for peace in the long-running war in Tigray, at least 17 people, including women and children, were killed in an airstrike, aid workers said.

The strike on Monday came days after dozens more were killed after a drone opened fire on a refugee camp in Ethiopia’s northern region of Tigray and highlighted the increasingly deadly role of armed drones, some supplied by American allies, in a conflict that has badly destabilized Africa’s second most populous country.

Video from the aftermath of the strike on Friday, provided by aid workers, showed the charred bodies of women and children laid out on blue plastic sheeting bearing the United Nations logo. On Monday, U.N. secretary-general António Guterres said he was “deeply concerned” about the attack, which occurred hours after the Ethiopian government issued a call for “national reconciliation.” At least 50 people had been killed, he said.

(Source: The New York TImes)

SUDAN

Egypt president urges Sudanese to talk, denies backing coup 

Egyptian President Abdel Fattah el-Sissi on Wednesday urged rival factions in Sudan to engage in talks to move forward in their transition to democracy after a coup toppled the civilian-led government.

Egypt, which has cultivated close ties with Sudan in recent years, fears that prolonged deadlock would further destabilize its southern neighbour.

Following the coup, some Sudanese opposition leaders, including former Foreign Minister Mariam al-Mahdi, suspected that Egypt had given a greenlight for Sudan’s military leader, Gen. Abdel-Fattah Burhan, to oust Prime Minister Abdalla Hamdok’s government.

Speaking at a news conference at the Red Sea resort of Sharm el-Sheikh, el-Sissi denied siding with either party in Sudan. He said Egypt supported all parties of the transitional government and insisted that his government doesn’t intervene in other country’s internal affairs.

El-Sissi’s call came as the United Nations began separate consultations earlier this week with Sudanese groups to build confidence between the military and the pro-democracy movement before they possibly engage in direct talks.

(Source: The Washington Post)

SOMALIA

Somali leaders agree to hold delayed elections

Somali leaders announced on Sunday they had struck a deal to wrap up parliamentary elections by February 25, after repeated delays that have threatened the stability of the troubled country.

The agreement was reached after several days of talks hosted by Prime Minister Mohamed Hussein Roble with state leaders to try to defuse a bitter political crisis.

Roble and Somalia’s President Mohamed Abdullahi Mohamed, better known by his nickname Farmajo, have long been at loggerheads over the long-delayed elections, with fears their squabbling could erupt into violence.

The international community has voiced its alarm over the crisis, fearing for the fate of the fragile Horn of Africa nation as it continues to battle a deadly insurgency by Al-Shabaab Islamist militants.

(Source: africanews.)

ERITREA

Resolve to strengthen participation in national affairs 

At a public seminar the Eritrean Embassy organized, Eritrean nationals residing in the port city of Mombasa, Kenya, expressed readiness to strengthen participation in national affairs.

At the seminar, Mr. Beyene Russom, Eritrean Ambassador to Kenya, gave an extensive briefing on the objective situation in the homeland as well as regional developments.

Providing an extensive briefing on the opportunities and challenges created by the peace and cooperation agreement reached between Eritrea and Ethiopia in 2018, Ambassador Beyene said that the instability being witnessed in the region is the making of external forces that are not pleased with the promising situation prevailing.

Ambassador Beyene said that the external conspiracies will be foiled by the integrated resilience of the peoples of the region and peace and stability will prevail.

(Source: Ministry of Information)

Key tax changes to look out for in 2022

On January 1, 2022, several key tax amendments contained in the Finance Act, 2021 (the Act) took effect. We take a look at these changes and the likely impact on taxpayers.

Requirement for multinational enterprises to file returns on activities in other jurisdictions

An ultimate parent entity of a multinational enterprise group will be required to submit to the Commissioner a return describing the group’s financial activities in Kenya, where its gross turnover exceeds the prescribed threshold, and in all other jurisdictions where the group has a taxable presence.

The provision only captures MNEs headquartered in Kenya; hence most international corporations that have subsidiaries in Kenya will not be impacted by the amendment.

The disclosure requirement is likely to increase transparency and assist the revenue authority in undertaking transfer pricing audits.

Interest restrictions

The Act restricted interest deduction to a maximum of 30% of Earnings Before Interest Tax, Depreciation and Amortization (EBITDA). It exempted banks and micro and small enterprises registered under the Micro and Small Enterprises Act, 2012.

This exemption is vital as interest expense forms a significant percentage of the total expenses of banks.

The restriction will also apply to payments that are economically equivalent to interest and expenses incurred to raise the finance.

Offsetting future tax liabilities

Taxpayers will now offset future tax liabilities with overpaid tax under section 47 (4C) of the Tax Procedures Act.

The change will offer relief to taxpayers as it automatically creates a tax credit that can offset future tax liabilities whenever the Commissioner is satisfied that there is an overpayment of tax. It also does not appear to limit the type of tax that such tax credits can be offset against.

Tax rebate for graduate apprenticeships

The provision under the Income Tax Act granting tax rebates to employers has been expanded to include apprenticeships provided to graduates from technical and vocational institutions. It was previously restricted to university graduates.

This amendment is a welcome move for employers who employ persons from these institutions as eligible employers will be allowed to deduct a tax rebate equal to 50% of the amount of salaries and wages paid to at least 10 apprentices. The rebate is in addition to 100% of the expense incurred on salaries and wages already allowed under Section 15 of the Income Tax Act.

Insurance relief

Resident individuals will begin enjoying insurance relief of 15% of the contribution made to the National Hospital Insurance Fund. An individual contributing KSh1,700 per month will enjoy a tax relief of KSh255 per month against the tax payable to the Kenya Revenue Authority.

This change is likely to increase the uptake of the NHIF insurance cover amongst Kenyans, potentially boosting the government’s efforts towards providing Universal Health Coverage in the country.

Capital allowances

    i. Definition of manufacture to apply to all distributors of electricity

The Act amended the definition of “manufacture” to allow electricity distributors who do not supply to the national grid to be eligible for investment allowances of 50% on the buildings and machinery used to generate electricity.

    ii. Definition of civil works

Civil works have been defined to include roads and parking areas; railway lines and related structures; water, industrial effluent, and sewerage works; communications and electrical posts and pylons and other electrical supply works; and security walls and fencing.

The definition provides clarity as to what civil works cost can be included to claim capital allowances.

  iii. Definition of farm works

Farm works has been defined to include farmhouses, labour quarters, any other immovable building necessary for the proper operation of the farm, fences, dips, drains, water and electricity supply works, and other works necessary for the proper operation of the farm.

The definition will provide clarity when computing capital allowance.

  iv. Investment allowance on certain capital expenditure

Investment deduction at 100% shall be applicable where the cumulative investment value in the preceding three years outside Nairobi City County and Mombasa County is at least two billion shillings. It will also apply where the investment value outside Nairobi City County and Mombasa County is at least 250 million shillings in that year of income.

In addition, investments in a special economic zone (SEZ) will attract an investment deduction at 100%.

This change aims to incentivize investments in SEZs as well as in locations outside Nairobi and Mombasa.

7th January 2022 Political and Regulatory Round Up

KENYA

Whistleblowers to get 10pc of cash recovered 

Whistleblowers whose disclosure results in the recovery of money or assets will get 10 percent of the cash or the value of the asset if MPs approve a new Bill.

The Whistleblower Protection Bill seeks to establish a fund for payment of monetary rewards for whistleblowers.

The Whistleblower Reward Fund will be used to reward individuals whose exposure results in the recovery of illegally acquired wealth.

The proposed Fund is being created at the time the KRA has increased reward to whistleblowers who expose tax cheats to a maximum of Sh5 million in a bid to tighten the noose on individuals and companies failing to declare taxes.

If the Bill sails through, a whistleblower who makes a disclosure that leads to the arrest and conviction of an accused person shall be rewarded with money from the fund.

(Source: Business Daily)

TANZANIA

President Samia Mulls Major Cabinet Reshuffle 

President Samia Suluhu Hassan announced on Tuesday plans to reshuffle the Cabinet of ministers to align with her administration’s speed and targets.

Speaking at the State House in Dar es Salaam, the President revealed that the grace period she offered for her appointees to learn her strategies and focus has expired and it’s time to appoint those who could match her speed.

Initially, the President announced she could dissolve the Ministry of Health, Community Development, Gender, Elderly and Children-separating the health sector that has been taking the lion’s share of the ministry whilst affecting gender related affairs.

But in what could be a new year surprise, the President said she had noted some of the Cabinet members had different moves that jeopardized her quest to bring development to the people.

(Source: Daily News)

UGANDA

EU mounts pressure on Uganda government to release Kakwenza 

The European Union (EU) has joined other rights bodies in demanding the unconditional release of Ugandan novelist and activist Kakwenza Rukirabashaija, held incommunicado for more than a week despite court ordering police to free him.

In a tweet on Wednesday, Mr Eamon Gilmore, the EU special representative for human rights, urged the authorities in Kampala to release Mr Kakwenza, who was kidnapped by gunmen on December 28 and disappeared until police acknowledged holding him.

Police say they are holding Mr Kakwenza on allegations of offensive communication after a series of belittling, derogatory and abusive tweets about President Museveni and his son, Lieutenant General Muhoozi Kainerugaba (Commander of Land Forces). He has, however, not been formally charged.

(Source: The East African)

RWANDA

Covid-19 vaccine mandates for all outbound Rwandan travelers

Rwanda Biomedical Centre (RBC) has announced a mandatory Covid-19 vaccine for all Rwandan travelers departing from the country’s points of exit.

According to a statement issued through RBC’s Twitter handle, all outbound eligible passengers will be asked to present a Covid-19 vaccination certificate.

However, the info note for passengers arriving in Rwanda, which was updated on January 2, did not mandate the vaccine for incoming travelers, though they were encouraged to.

According to the info note, all arriving passengers will also test, quarantine for 3 days, and leave the quarantine after a negative PCR and rapid test, the latter being free of charge.

(Source: The News Times)

ETHIOPIA

US special envoy to visit Ethiopia this week

The US special envoy for the Horn of Africa, Jeffrey Feltman, will travel to Ethiopia this week to hold talks with the authorities about the ongoing civil war. The US State Department said that Mr Feltman was “to engage with senior officials regarding the prospects for a broader peace”.

The rebels have in recent times withdrawn to their stronghold Tigray region in the north of Ethiopia. The Ethiopian government said its troops would not pursue the rebels into the region.

“We do believe this offers an opportunity for both sides to halt combat operations and come to the negotiating table,” State Department spokesman Ned Price said.

The special envoy’s visit comes after the US removed trade privileges for Ethiopia over rights abuse claims.

(Source: BBC News)

ERITREA

Eritrea and China agree to strengthen Strategic Partnership 

President Isaias Afwerki received at the State House today a Chinese senior delegation led by State Councilor and Foreign Minister Wang Yi.

Both sides agreed to work on joint development programmes including human resources development, infrastructure, and development of Massawa and Assab ports as well as in the mining sector.

Foreign Minister Wang Yi on his part underlined alignment of views and positions of both countries on major issues and expressed gratitude for Eritrea’s positive stance.

Mr. Wang Yi also affirmed China’s rejection of unilateral and illicit sanctions on Eritrea.

(Source: Ministry of Information Eritrea)

SUDAN

What next for Sudan after PM Hamdok’s resignation? 

With Hamdok now gone, analysts say the military may look to co-opt a new civilian face to retrieve billions of dollars in much-needed foreign aid, which was suspended following the coup.

Several unconfirmed reports say military leaders have already approached Ibrahim Elbadawi, a former finance minister who served under Hamdok in 2019 as Sudan embarked on a democratic transition following the military removal of longtime ruler Omar al-Bashir in the wake of mass protests. However, the United States, United Kingdom and Norway, as well as the European Union, have warned the ruling military against unilaterally imposing a new prime minister, threatening to withhold financial assistance if “a broad range of civilian stakeholders” was not involved in the process.

At least 57 protesters have been killed in mass rallies that have gripped Sudan since the coup and continued following the November 21 deal between al-Burhan and Hamdok, according to medics.

Kholood Khair, the managing partner of Insight Strategy Partners, a think-tank based in Sudan’s capital, Khartoum, said she anticipated the military to escalate repression to provoke street violence. That way, she argued, the military could portray the pro-democracy movement as a bunch of young angry men who are a threat to national security.

(Source: Aljazeera)

SOMALIA

Rethinking the electoral process in Somalia 

Unless there is a fundamental change to the political order of Somalia, the political stagnation will continue unabated, risking a backsliding in the state building.

As there are no accountability links between politicians and the public, the politicians across the spectrum are very much in favor of indirect elections – a process marked by malpractice and distrust. As a result, the country is experiencing a protracted systemic crisis.

Political inequality is arguably the biggest source of conflict in Somalia. Hence, authorities should set out a clear road map to hold elections based on direct universal suffrage that includes all sectors of society.

(Source: Daily Sabah)

Government enters watershed period with the February 9 deadline for public officers’ resignation

The mandatory resignation requirement for public officers vying in the 2022 General Election has run into legal headwinds.

Public officers eyeing elective political seats are required by law to resign at least six months to the polls. However, the requirement, anchored under section 43(5) of the Elections Act, 2011, exempts the President, Deputy President, Governors and their deputies, MPs, and MCAs.

In 2017, Justice Njagi Marete declared section 43(5) and (6) of the Elections Act, 2011 unconstitutional and directed IEBC not to bar candidates who do not resign six months to polls. The learned judge termed the requirement “unreasonable and unjustifiable in a democratic society” and added that there was no compelling public interest for mandatory resignation unless and until a public officer had been nominated by their respective political parties.

This week, a secondary school teacher, Mr James Oroko, moved to court seeking to stop IEBC from disqualifying him from contesting if he does not resign from his employment by the February 9 deadline. Mr. Oroko argues that the provision on mandatory resignation is discriminatory and offends Article 27 of the Constitution. If implemented, the teacher avers that he will lose his source of livelihood upon which he depends to support his political ambitions. The case is set for mention on January 31.

Following an application in the High Court in December last year challenging a directive issued by IEBC requiring public officers contesting for elective offices in the August 9 General Election to quit by February 9, Justice Monica Mbaru has this week issued interim orders shielding civil servants from the mandatory requirement pending a hearing on January 24.

Despite the reprieve secured by public officers, the February 9 deadline marks the start of the last days of the current administration. Top public officials, including CSs, Principal Secretaries, parastatal heads, ambassadors, board members, and directors of state agencies eyeing political seats, are expected to resign next month. Likely, such officers who leave office might not get substantive replacements until a new administration comes in.

The exit by top civil servants can disrupt the discharge of critical roles by the incumbent officeholders. It is unlikely that the lame-duck phase of the current administration will alleviate this probability.

With barely 32 days left until the February 9 deadline, civil servants with political ambitions should not rest easy until the courts settle the matter. Given the previous pronouncement by the High Court on the unconstitutionality of the mandatory resignation provision and the public interest implications of its implementation, there is a likelihood of the court upholding its earlier decision.

17th December 2021 Political & Regulatory Round Up

KENYA

Civil servants face Sh1m fine for failure to declare wealth by end year 

Civil servants risk a Sh1 million fine or a jail term of two years if they fail to declare their wealth and that of their spouses and children ahead of the December 31 deadline.

Public Service Commission CEO Simon Rotich said that all the 884,600 national government, county and parastatal workers must make their wealth declarations by end of the year or face penalties and other undisclosed administrative action.

State workers who will provide incomplete and inaccurate information in their declarations face similar punishment in a move meant to curb endemic graft in government.

Public servants are required by law to reveal their incomes, bank deposits and assets such as land, buildings and vehicles once every two years. The filing must also capture the wealth of their spouses and children below 18 years.

The window for civil servants to declare their wealth was opened last month and will lapse on December 31.

The last wealth declaration was done in December 2019.

(Source: Business Daily)

TANZANIA

Tanzania’s media on the spot over 2020 election coverage 

The media fraternity in Tanzania has been criticised for unfair coverage of the 2020 General Election, according to findings of a new report.

The Yearbook on media quality in Tanzania report, published by the University of Dar es Salaam (Udsm) School of Journalism and Mass Communications (SJMC) highlights that most publications inclined towards CCM compared to other parties.

Others are absence of researched and investigative election reports coverage, failure to question political parties’ election manifestos and providing little opportunity to citizens as compared to the government and its leaders as well the media provision of little opportunity to the women.

Tabling the report “Monitoring the Watchdog: How the Media Covered the 2020 Elections” yesterday, Media Quality in Tanzania project researcher Abdallah Katunzi said over 2,400 media units (stories, articles and programmes) from 14 newspapers, 14 radio stations and five television stations from Tanzania mainland and Zanzibar were assessed.

(Source: The East African)

UGANDA

Uganda police, army surround Bobi Wine’s home ahead of Kayunga visit 

Police and the army on Tuesday morning surrounded the home of former presidential candidate Robert Kyagulanyi, popularly known as Bobi Wine, ahead of his planned visit to Kayunga District in central Uganda.

Security officers set up roadblocks on all the roads near the National Unity Platform (NUP) leader’s home in Magere, Wakiso District.

“#DictatorMuseveni is so shameless. He places me under house arrest, and then uses taxpayers’ money to ferry people to go see him in Kayunga! This is why we are not giving up until Uganda is free,” Mr Kyagulanyi said moments after an arrest van and a police patrol truck were seen speeding from his compound.

Mr Fred Enanga, the police spokesman, told journalists on Monday: “No one has blocked Bobi Wine from campaigning for his candidate in Kayunga, but the EC (Electoral Commission) issued guidelines banning processions and observance of protocols against Covid.”

(Source: The East African)

RWANDA

Rwanda tightens virus rules as it records six Omicron cases 

Rwanda has tightened rules on gatherings, including a ban on night clubs, after health officials recorded six cases of the highly transmissible Covid variant, Omicron.

A Cabinet meeting chaired by President Paul Kagame Tuesday revised virus rules, imposing restrictions on crowds, and calling for vaccination and regular testing as part of efforts to slow transmission of the new variant ahead of the end year festive season.

The new virus preventive measures, which come into effect starting December 16, will remain in place for one month, but may be reviewed at any time.

In particular, the Cabinet suspended all night clubs as well as live band entertainment in other venues, while organised concerts will be subjected to approval on a case by case basis by relevant government officials.

Public and private sector offices, which had recalled workers and were operating at 75 per cent and full capacity, respectively, have been urged to operate at no more than 30 per cent and 50 per cent capacity, respectively.

All arriving passengers must be quarantined for three days at designated hotels with a PCR test taken on arrival, and additional tests taken on day three and on day seven at their own cost.

(Source: The East African)

ETHIOPIA

The Nobel Peace Prize that Paved the Way for War 

New evidence shows that Ethiopia’s prime minister, Abiy Ahmed, had been planning a military campaign in the northern Tigray region for months before war erupted one year ago, setting off a cascade of destruction and ethnic violence that has engulfed Ethiopia, Africa’s second most populous country.

Mr. Abiy, a Nobel Peace Prize laureate, seen recently in fatigues commanding troops on the battlefront, insists that war was foisted upon him — that ethnic Tigrayan fighters fired the first shots in November 2020 when they attacked a federal military base in Tigray, slaughtering soldiers in their beds. That account has become an article of faith for Mr. Abiy and his supporters.

In fact, it was a war of choice for Mr. Abiy — one with wheels set in motion even before the Nobel Peace Prize in 2019 that turned him, for a time, into a global icon of nonviolence.

The Nobel win stemmed largely from the unlikely peace deal Mr. Abiy struck with Isaias Afwerki, the authoritarian leader of Eritrea, within months of coming to power in 2018. That pact ended two decades of hostility and war between the neighboring rivals, and inspired lofty hopes for a transformed region.

Instead, the Nobel emboldened Mr. Abiy and Mr. Isaias to secretly plot a course for war against their mutual foes in Tigray, according to current and former Ethiopian officials who spoke on the condition of anonymity to avoid reprisals or protect family members inside Ethiopia.

(Source: The New York Times)

ERITREA

Excerpt of statement by Minister Osman Saleh, On the occasion of the 73rd Anniversary of the Universal Declaration of Human Rights 

“…On this important occasion I would like to highlight the continued irresponsible use of unilateral sanction by the USA against the State of Eritrea.

It is evident that unilateral sanction imposed on States and their instrumentalities, including high ranking officials violates the basic violation of the fundamental principles of the UN Charter, i.e. sovereignty, self-determination, sovereign equality and respect for the independent exercise of sovereignty of states to freely determine their own form of economic, political, cultural and social development.

Unilateral coercive measures also violate the underpinning principles and purposes of the UN Charter- non- non-use of force or threat of use of force, peaceful settlement of disputes and development of friendly relations among nations.

…finally, I would like to call upon the UN and its members to exert continuous efforts to uphold the purposes and principles of the Charter and declare all acts of unilateral sanctions illegal and also condemn and take measures against perpetrators of such acts.”

(Source: Ministry of Information Eritrea)

SUDAN

Guardians of the revolution: The street activists defying Sudan’s coup 

Mass demonstrations are expected in Sudan this weekend, on the third anniversary of the country’s revolution, in a new test of strength between pro-democracy activists and the military, whose coup in October toppled the country’s fragile transitional government.

Neighbourhood-based resistance committees are, once again, playing a key role in mobilising opposition, organising marches, building street barricades, and debating a political strategy for the way forward.

The December 19 protests will underline popular opposition to the new military-controlled administration fronted by Prime Minister Abdalla Hamdok – released from house arrest after agreeing a deal last month with coup leader General Abdel Fattah al-Burhan.

An aid freeze imposed by major donors immediately after the coup has yet to be lifted – a significant blow for an already precarious economy.

(Source: The New Humanitarian)

SOMALIA

Roble: “No one has touched my back and no one is hiding. The election is a victory.” 

The caretaker Prime Minister Mohamed Hussein Roble said the country’s election situation was good, although he noted that there were concerns about the lack of transparency.

Roble said he had taken steps to rectify the election irregularities, and had held consultative meetings with the National Consultative Assembly and Committees, to address existing concerns.

The Prime Minister indicated that he was planning another meeting with the National Consultative Assembly to discuss strengthening transparency in the electoral process and expediting it.

He called on the political authorities and stakeholders to work together to ensure that the elections are transparent, credible and bring political stability to the country, as well as free and fair elections.

(Source: Radio Dalsan)

The year in review: Highlights on key legislative interventions that impacted the private sector

Several legislative interventions that have affected the private sector came into force in 2021. As the year draws to a close, we look back at some of these interventions and their resultant impact.

The Finance Act, 2021 (the Finance Act) exempted resident persons from Digital Services Tax (DST). This was a relief for online platforms as this allowed such entities only to pay corporate income tax when they become profitable.

The Finance Act also stated that excise duty at the rate of 25% on imported glass bottles would not apply to glass bottles imported from any of the countries within the East African Community (EAC). This was a welcome move and would improve Kenya’s trade relationship with the countries in the EAC. It was also in line with the EAC objective of enhancing domestic, cross-border, and foreign investment in the EAC.

Further, the Finance Act increased excise duty on telephone and Internet data services from 15% to 20%, with the change inevitably increasing telephone and Internet data costs which Kenyans bore.

The Tax Laws (Amendment) (No.2) Act, 2020 reinstated the previous corporate tax rate of 30%, effective from January 1,  2021. In April 2020, the corporate income tax rate for resident companies had been reduced from 30% to 25% through the Tax Laws (Amendment) Act, 2020, to cushion taxpayers against the negative impact of the Covid-19 pandemic.

The Cabinet Secretary, National Treasury published an order in the Gazette, Legal Notice No. 206 dated 2 December 2020 amending the VAT rate back to the pre-Covid rate of 16% from 14% with effect from January 1, 2021.

On April 9, 2021, the Cabinet Secretary for Information, Communications and Technology, Innovation, and Youth Affairs published in the Kenya Gazette an amendment to the National Information Communications and Technology (ICT) Policy Guidelines, 2020 (the 2020 ICT Policy). The 2020 ICT Policy requires all companies providing ICT services to have at least 30% substantive Kenyan ownership. Companies registered to exclusively offer Business Process Outsourcing (BPO) Services were exempted from the local shareholding rule, a move seen to act as an incentive to attract foreign investment in the sector.

The Business Laws (Amendment) (No. 2) Act, 2021 was signed into law on 30th March 2021 to facilitate the ease of doing business in Kenya. Some of the key highlights include:

  1. The Law of Contract Act was harmonized with the Companies Act, 2015 by eliminating the requirement of a company seal to execute documents for companies. This made it easier to register online or file documents for companies.
  1. In light of the Covid-19 pandemic, various government agencies, including the Business Registration Service and the Capital Markets Authority (among other institutions), issued guidelines on conducting hybrid and virtual general meetings by companies.
  1. The Small Claims Court Act was amended to provide that all proceedings before the small claims court must be heard and determined on the same day or, if heard on a day-to-day basis, must be finalised within 60 days from the date of filing the claim.
  1. Harmonization of the date of remitting statutory deductions, i.e., NSSF, NITA, NHIF, and Pay as you Earn (PAYE), such that they are all submitted by the 9th of every month.

The Employment (Amendment) Act, 2021 introduced pre-adoptive leave that entitles an employee to one (1) month pre-adoptive leave with full pay where a child is placed in the continuous care and control of the employee.

The Central Bank of Kenya (Amendment) Act, 2021, brought digital lenders under the regulatory ambit of the Central Bank of Kenya (CBK). It is anticipated that CBK will rein in unscrupulous digital lenders employing unethical or illegal methods such as debt shaming, predatory lending, charging exorbitant interest rates, and unlawful sharing of defaulters’ data.

10th December 2021 Political & Regulatory Round Up

KENYA

No More Harambees for 2022 Elections Aspirants (Source: Daily Nation)

Political aspirants will from 9th December not be allowed to participate in harambees for the benefit of others, thus ending a campaign issue that has fuelled conflict between Deputy President William Ruto and opposition chiefs led by Mr Raila Odinga.

The DP has regularly held fund-raisers for churches, women and youth groups, giving generous donations as his opponents in the presidential race questioned the source of the cash.

But such harambees are now outlawed as the provision of the Elections Act that bans fund-raisers within eight months of an election come into force.

The Independent Electoral and Boundaries Commission (IEBC), which set December 9 as the date to end fundraising by aspirants, has warned anyone who violates the law risks disqualification from next year’s elections.

An attempt to level the playing field by discouraging the influence of money in elections informed the law designed to ensure aspirants with deep pockets do not buy voters.

While questions have been raised about IEBC’s ability to enforce electoral laws, rival aspirants can petition the commission if they collected evidence of the electoral offence.

TANZANIA

US advices against travel to Tanzania over Covid-19 risk (Source: The East African)

Washington has put five countries, including Tanzania, on its red list, advising its citizens against travel to these nations.

The US Centers for Disease Control and Prevention (CDC) has put Tanzania together with France, Portugal, Andorra, Cyprus, Jordan and Lichtenstein under its high-risk countries, discouraging American citizens from travelling to these destinations over Covid-19 related risks.

Despite frequent warning alerts from Tanzania’s Health Ministry, public compliance to Covid-19 prevention measure has remained low, the US Embassy said.

The alert comes as the US Embassy in Dar es Salaam warned that community transmission of the novel virus continues across Tanzania.

UGANDA

Parliament moots new law to streamline mining sector (Source: The Independent)

The Parliamentary committee on Environment and Natural Resources has commenced scrutinizing the Mining and Minerals Bill, 2021.

The Minister of State for Minerals, Peter Lokeris, on Tuesday, 7 December 2021 led a team from the Ministry of Energy and Mineral Development to introduce the long-awaited Bill to the Committee for scrutiny.

The Bill intends to cure the gaps unattended to by the current law [the Mining Act, 2003] by seeking to promote transparency of mining operations, organise, license, regulate and transform artisanal and small-scale mining in Uganda and to create an enabling environment for attracting investments among others.

Whereas the Bill was well received by MPs on the committee, Alex Ruhunda, Fort Portal Central MP was worried that the Bill might erode government efforts to promote local content by instead empowering foreign companies.

The Bill among others seeks to introduce the production sharing agreement system, set up a National Mining Company to handle the State’s commercial interests in the mining subsector and establish the Mineral Protection Force within the Directorate of Geological Survey and Mines to protect minerals against malpractices and enforce compliance.

RWANDA

Rwanda and China agree to eliminate double taxation (Source: The New Times)

China and Rwanda have signed an agreement that will see the two countries eliminate double taxation with respect to tax on income and the prevention of tax evasion and avoidance (DTAA).

The agreement was signed in Kigali by Uzziel Ndagijimana, the Minister of Finance and Economic Planning and Rao Hongwei, the Chinese Ambassador to Rwanda.

The existing DTAAs already in place in Rwanda have shown a big impact in terms of boosting the inflow of investment and trade from treaty partners.

Among the factors that informed the development officials include, growing number of investors coming from China, robust cross border trade, growing appetite for Rwandans to invest in China, relevance of tax systems as well as warm economic ties between the two countries.

Currently, more than twelve (12) DTAAs have been signed and several others are under negotiation. The Government’s target is to conclude more DTAAs in FY2021/22 in a bid to widen the DTAA network and improve the ease of doing business in Rwanda.

ETHIOPIA

Ethiopia’s PM Abiy to return to Addis Ababa from battlefront (Source: Aljazeera)

Ethiopia’s Prime Minister Abiy Ahmed says he is returning to the capital Addis Ababa from the battlefront after pro-government forces claimed major advances in recent days against Tigrayan forces.

“PM Abiy Ahmed Ali momentarily back to the office following successful completion of the first phase of ‘Operation for National Unity in Diversity’,” Abiy’s office wrote, along with the statement, on Twitter.

In recent days, the government has announced the recapture of several towns, including the UNESCO World Heritage site of Lalibela which is famed for its 12th-century rock-hewn churches.

On Monday, the government announced its forces had recaptured the strategic towns of Dessie and Kombolcha. The TPLF has dismissed the government’s claims, saying the rebels were making strategic withdrawals and remained undefeated.

The fighting has killed thousands of people, displaced more than two million and driven hundreds of thousands into famine-like conditions, according to United Nations estimates.

ERITREA

Ministry of Justice organizes ‘Law Week’ (Source: Ministry of Information Eritrea)

The ‘Law Week’ organized by the Ministry of Justice was opened on 6th December in the presence of senior Government and PFDJ officials, religious leaders as well as invited guests under the theme “Law and Nation Building”.

The main objectives of the ‘Law Week’ are raising awareness of the public and ensuring the sustainability, and continuity of identifying values, laws, and orders of the Eritrean public, as well as ensuring active and comprehensive participation of every citizen.

The Law Week that will stay open until 12th December will include various programs including seminars on ‘Law and Nation Building’ and ‘Eritrea and International Law’ as well as workshops focusing on drafting and consolidation of laws and programs for Eritreans in the Diaspora, planting trees, sports activities, blood donation, and others. 

SUDAN

Sudan police fire tear gas as thousands protest against military (Source: Aljazeera)

Police have fired tear gas at protesters near the presidential palace in Khartoum as thousands of Sudanese took to the streets on Monday across several cities in the latest demonstration against the October military coup and subsequent deal that reinstated Prime Minister Abdalla Hamdok.

The demonstrators marched from various districts of the capital, many chanting “No to military rule” and “The army might betray you, but the street will never betray you”, according to the AFP news agency.

Monday’s protests were called by the Sudanese Professionals Association and the so-called resistance committees, which spearheaded the uprising against al-Bashir and then the military coup.

Among the protesters’ demands are the restructuring of the military under civilian oversight, purging officers loyal to al-Bashir and disbanding armed groups including the Rapid Support Forces (RSF).

SOMALIA

Somali PM endorses electoral team’s decision to review disputed poll (Source: The East African)

Somali Prime Minister Hussein Roble has welcomed a decision taken by the Federal Electoral Implementation Team (FEIT) to suspend confirmation of election to two seats of House of the People (Lower House of the Parliament) that were the subject of a dispute.

FEIT said the election of the two had not followed the right procedure.

The PM also urged the Federal Electoral Dispute Resolution Committee to discharge its functions in a legitimate manner, consistent with the agreements and procedures on the electoral disputes.

The FEIT also underlined that there were a number of complaints related with elections in Galmudug State, Central Somalia, that are under review.

The PM reiterated that the electoral teams at federal and state levels and the dispute resolution team should ensure that clan leaders, civil society representatives and the electoral candidates all meet the set criteria.

Kenya’s Policy Options for Steady Economic Growth during the Transition

Kenya’s economy has been on a path to recovery in 2021 following the easing of Covid-19 containment restrictions. As the economy rebounds, the country heads into an election year. Against this background, the Parliamentary Budget Office recently released the 13th edition of the Budget Options for 2022/2023 and the Medium Term (Budget Options). The document focuses on the critical budget and policy options that Kenya can implement to achieve a higher economic growth target.

For the past decade, except for 2020, the economy registered an average growth rate of 5 percent. During this period, the highest registered growth was 8.1 percent in 2010 and was mainly driven by growth in the agriculture sector. The 2021 GDP growth is estimated at 5.7%. Significant recovery of two of the three key sectors which registered negative growth in 2020, namely: the Transport and storage sector (which contracted by -7.8%) and the education sector (which contracted by -10.8%), is expected to have boosted 2021 economic performance.

Nevertheless, there has been a substantial increase in poverty, unemployment, and gender inequality, as well as a reduction in per capita income. Therefore, it is imperative to identify and focus on priority sectors for investment by both the government and private investors, which will lead to a sustainable economic recovery and inclusive growth.

Is it possible to achieve higher economic growth? The key intervention areas likely to have the highest impact on growth are agriculture, manufacturing, and exports. To this end, the Budget Options sets out policy options for enhanced economic growth:

  1. Re-orienting agriculture:
  • Provision of adequate funds may be in the form of conditional grants to counties for agricultural extension services. The National government should also prepare an agriculture extension services policy to guide these services.
  • Provision of funds in the form of conditional grants to the 38 Counties to provide relevant subsidized inputs to targeted small-scale farmers.
  • Provision of funds and increased efficiency and accountability in the construction of small dams for water storage and small-scale irrigation projects across various parts of the country.
  • Operationalize the National Drought Management Fund and ensure the county drought management committees are working. 

2. Supporting Kenya’s foreign policy on trade and investments – Restructuring the foreign service through enhanced usage of Honorary Consuls instead of fully-fledged missions. Honorary Consuls are cost-effective as they serve for free and only require reimbursement of expenses incurred in offering their services. Further, their knowledge of local conditions and personalities provide them with an invaluable ability to leverage local and regional networks. 

3. Addressing Challenges in Land Transfers to encourage investment

  • Provision of funds for final survey and vesting programmes. This will go towards the final survey and vesting programme for compulsorily acquired public land, the mapping of public land in all counties, and the development of a Public Lands information depository by June 2023.
  • Ensure roll out of Ardhisasa digital registries to all counties.

4. Supporting Suitable Forest Management

  • Provide funds for rehabilitation of Kenya’s five major forest Water Towers, which have deteriorated over the last few decades.
  • Develop a Policy on Sustainable Forest Management that will Include neighbouring communities.

5.  Linking education to the labour market needs

  •  Learning should be aligned with labour market needs and should primarily be geared towards access to the key industries which have consistently supported economic growth. Among the top industries which contributed to growth in the last five years are Agriculture and allied industries (20.8%), Transport (10.8%), and Real Estate (9.3%).
  • The existing labour market requires a blended set of skills in areas such as agriculture, manufacturing, ICT, construction, retail, health, and education, amongst others, for economic growth.
  • Re-orienting agriculture productivity through modernization by supporting agricultural-related technical courses.
  • Investing in training related to manufacturing to upscale the contribution of manufacturing in the country.
  • Expansion of access to STEM to learners and ensuring the quality of learning.

6.  Access to quality healthcare

  • The funding to the five National referral hospitals be increased to support the critical areas of operations, especially in managing health workers and supporting health commodities acquisition.
  • The National government to consider coming up with a health support package for counties to establish level 3 health facilities, especially in the counties with a low number of health facilities in the country.
  • Enhance the NHIF cover to the vulnerable, including older persons, persons with disabilities, orphans, and poor households

7.       Supporting MSMEs

  • There is a need to create a multi-agency task force to synchronize government efforts that promote the MSMEs through the various stages of the business cycle. The multi-agency team will monitor and report the progress made by each institution towards progressing beneficiaries to the next stage of incubation.
  • Through the proposed multiagency coordination team, the relevant institutions will be tasked to undertake specific interventions based on the nature of the business and requisite needs assessment to support eligible beneficiaries to the last stage.