KENYA

The return of Pre-COVID taxes on VAT and Income Tax 

The Office of the Cabinet Secretary for Treasury and Planning has released a press statement today stating that the preCOVID tax rates on VAT and income tax are back from 1st January 2021.

• Corporate tax rate reverts to 30% from the current 25%
• Individual Income Tax rate reverts to 30% from the current 25%
• Value Added Tax (VAT) rate reverts to 16% from the current 14%

The government will cushion persons earning under Ksh.24,000 and below by retaining the 100% tax exemption/relief.

CMA seeks to review Collective Investment Schemes Regulations in response to market dynamics

The Capital Markets Authority (CMA), with the support of FSD Africa, has onboarded a consultant to review the Capital Markets (Collective Investment Schemes) Regulations, 2001 to make them more robust and facilitative to market dynamics.

The CMA Chief Executive, Mr. Wyckliffe Shamiah, explained that the proposed legal framework review is designed to address stakeholders’ concerns with the current framework and facilitate the development of a robust asset management sector, in line with the aspirations of the 10-year Capital Market Master Plan (2014-2023). 

The Master Plan projected that assets under management in Collective Investment Schemes (CISs) in Kenya were expected to increase from Kshs 40 billion ($ 360 million) in January 2014 to Ksh 132 billion ($ 1.2 billion in 2020), rising to Ksh 220 billion ($ 2 billion) in 2023. As at 30 June 2020, assets under management in CISs was Ksh88.1 billion ($ 801 million). The growth projections have been slowed down largely by the effects of Coronavirus pandemic that affected most sectors of the economy.

Source: CMA

Digital services earn Co-op ‘Bank-of-the-Year Award’

Co-operative Bank of Kenya has scooped this year’s ‘Bank of the Year in Kenya’ award courtesy of the Financial Times of London on increased use of digital services.

The lender won the award during The FT Banker 2020 Awards — an annual fete that recognises banks who have excelled in various categories such as technology and efficiency.

Organisers of the fete said the bank has been riding on deepened digital offerings such as e-credit and M-Co-op cash to enhance efficiency of services to customers.

Source: Business Daily

State seeks Sh40 billion in reopened T-bonds

The government has reopened two 15-year Treasury bonds targeting Sh40 billion amid expectations that interest rates may go up due to higher government appetite for local borrowing.

The Central Bank of Kenya (CBK) said the proceeds of the December bond sale will go towards general budgetary support, with the sale period lasting from November 30 to December 8 2020.

The reopened papers were first sold in 2012 and 2019, meaning they have 6.82 and 13.48 years to maturity. The 6.82-year option is likely to help attract banks to the sale, given that the lenders prefer shorter dated paper.

The 2012 paper carries a coupon of 11 percent, while the 2019 option will carry a coupon of 12.734 percent.

Source: Business Daily

Insurance premiums to slow on spending cuts

Insurers must prepare for muted growth in premiums as firms and individuals cut spending, a new report has warned, citing increased economic hardships and service mistrust in the Covid-19 era.

Audit and advisory firm Deloitte warns that consumers in countries such as Kenya are running on tight purses and the temptation to opt out of insurance plans is elevated.

Source: Business Daily

Safaricom share now accounts for 58pc of all NSE stocks

Safaricom’s share of combined investor wealth at the Nairobi bourse touched a high of 58.79 percent on Wednesday after weeks of a steady rise in its stock prices in a period that has seen other dominant stocks shed value.

The telco claimed at least half of the market wealth on March 19 and has been deepening its share of Nairobi Securities Exchange (NSE) wealth since then, with strong gains coming from the first week of October. Already, the Capital Markets Authority (CMA) has flagged the dominance of five companies — including Safaricom — in the 65-stock Nairobi bourse as a big risk, with the performance of their shares dictating whether the market goes up or down on any given day.

Safaricom share has gained 10.17 percent or Sh3 from October 6 to close trading at Sh32.95, adding Sh120 billion on its market value to take it to Sh1. 32 trillion.The gain comes in a period when other stocks have shed Sh19.7 billion, cementing Safaricom’s dominance at the Nairobi bourse from 55.94 per cent on October 6.

Safaricom, Equity Bank Group , East Africa Breweries Limited , KCB Group and Co-operative Bank have always accounted for more than 75 per cent of the total investor wealth at the NSE.

Source: Business Daily

Airtel takes on Safaricom in 5G race with Nokia deal

Airtel Kenya has signed a three-year deal with telecom equipment maker Nokia for revamp of its network to include deploying fifth-generation (5G) mobile internet services.

Airtel said the deployment of 5G-ready networks will help it capitalise on burgeoning mobile Internet use in the country and put in a race with Safaricom on who will be the inaugural operator to offer commercial and superfast services in the region.

Nokia will modernise its telecom network in Kenya, with high-speed 4G gear, and for the deployment of 5G-ready mobile internet services equipment.

Safaricom said the firm had completed testing and trials for the upgraded network in preparation to launch Kenya’s first 5G mobile internet services this year.

The Airtel upgrade started in June and will cover hundreds of sites across the country as it seeks to strengthen its network after recording sharp growth in subscriber numbers over the past three years.

Source: Business Daily

UGANDA

Banks restructured loans worth UGX 6.7 trillion due to Covid-19 -Report

Banking institutions have since April restructured loans with clients worth 6.7 Trillion Shillings after repayments were affected by the Covid-19 pandemic.

Bank of Uganda in April 2020 granted permission to all banking institutions to provide credit relief through the restructuring of loans of both corporate and individual customers who were or would be affected by the COVID-19 pandemic.  

The objective according to the Bank of Uganda (BoU) Quarterly Financial Stability Review report was to safeguard financial stability and alleviate the impact of the COVID-19 pandemic on the financial sector and economic growth.

The benefiting sectors from the credit relief include that of trade, real estate, manufacturing and transport which were the hardest hit by the pandemic.

Source: The Independent

Exporters push for tough measures against trade barriers from EAC states

Manufacturers have asked the Government to institute tough measures against EAC states that continue to block imports from Uganda.

Under their umbrella body, Uganda Manufacturers Association- UMA, they note that the continued blockade of Ugandan goods from entering the Kenyan market is a violation of the EAC common market protocol.

The Executive Director UMA Daniel Birungi said there is a need to create a level playing field of manufacturers across the region to have a true common market and real integration.

He says that manufacturing cannot be a core sector for the development of Uganda as spelt out in the NDP III without providing an adequate market for products that Uganda has demonstrated competitiveness.

Birungi has outlined countless harassment and trade barriers instituted by Kenya and these include baseless claims about the quality of Ugandan goods as well as their origin even if they have undoubtedly originated from Uganda.

Source: The Independent

Inflation drops to 3.7 per cent

The slight decrease in transport fares for the short distance below 50 kilometres has pushed down annual headline inflation to 3.7 per cent, according to data from Uganda Bureau of Statistics (Ubos).

Inflation for the period ended November dropped from 4.5 per cent in October 2020 on the back of a slight drop in the cost of public transport fares, which is a fundamental factor in the cost of goods and services.

While releasing the Consumer Price Index for the period ended November, Ms Aliziki Kaudha Lubega, the Ubos director macroeconomic statistics, said transport fares, especially for shorter distances, had dropped by 6 per cent while those for longer distances had not changed.  

During the period annual core inflation declined from 6.3 percent to 5.8 percent due to the decrease in annual services inflation to 11.1 percent from 11.8 percent in October. 

Source: Monitor

Digital stamps have exposed dishonest industrialists – Govt

Finance Minister Matia Kasaija has said the government had anticipated manufacturers to resist implementation of digital tracking solutions because the system has exposed illegal activities orchestrated by some industrialists.

Digital tracking solutions, which are being implemented by Uganda Revenue Authority (URA) and lately Uganda National Bureau of Standards (UNBS), seek to fight under declaration of production capacity and substandard goods.

However, they continue to face resistance particularly from manufacturers, who say they have a high cost burden.  

Source: Monitor

TANZANIA

Digital role in managing investments during Covid-19 pandemic

ABSA Bank Tanzania has said the Covid-19 pandemic has made the banking industry embrace automation and digitalisation so as to offer customers the convenience and flexibility in managing their investments.

The Absa Regional Operations Chief Executive, Retail and Business Banking, Digital and Customer Experience, Vimal Kumar said coronavirus scare has affected every sector in all societies across the globe, with everyone impacted from an economic, health and social perspective.

Source: Tanzania Standard Newspapers Ltd

Domestic credit by banking system up by 11 per cent

DOMESTIC credit by the banking system grew by 10.7 per cent in the year ending October compared to 8.7 per cent in the corresponding period last year.

According to the Bank of Tanzania (BoT) monthly economic review for November, the credit extended to the central government through purchases of government securities grew by 39.1 per cent, much more than 3.4 per cent. The credit to the private sector increased by 946.7bn/- , equivalent to an annual growth of 4.9 per cent, compared to 5.2 per cent in September this year.

Credit growth to the private sector was more pronounced in transport and communication activities, with a growth rate of 20.8 per cent, trailed by personal activities (17.0 per cent) and hotels and restaurants (10.6 per cent).

Source: Tanzania Standard Newspapers Ltd

Analysts predict yields drop for 15-year bond

THE debt analysts are predicting a slight drop weighted average yield due to expected over subscription of a 15-year government bond today.

The over subscription projection based on the fact that the demand for the short term government instrument is high thus lowering the yield rates. The government sought to borrow 122bn/- from the public with a coupon rate of 13.5 per cent per year in the next 15 years.

The Tanzania Securities projected in its Weekly Market Blast that the instrument weighted average yields (WAY) to slight drop based on high appetite.

Source: Tanzania Standard Newspapers Ltd

RWANDA

BPR Atlas Mara Ensuring Safety in Internet Banking

A 2020 Central Bank report shows that the target has been to improve the Quality of Banking Services by Integrating Internet banking with Financial Management Information System-FMIS in 2020.

According to the report, the total volume of internet banking transactions increased by 6% in 2019-2020 from 1,004 billion to 1,064 billion. This growth was mainly due to measures put in place to mitigate the spread of the COVID-19 pandemic and the Government’s program to achieve a cashless economy

Among the biggest contributors to this milestone is Banque Populaire du Rwanda (BPR Atlas Mara).

In this Covid-19 era where people are very busy, wasting time in queues for the bank’s clients is almost becoming a story of the past. BPR internet banking services are secure and game changer.

Source:KT Press

ETHIOPIA

Ethiopian Airlines Wins Decade of Airline Excellence Award for Africa Region

Ethiopian Airlines won the ‘Decade of Airlines Excellence Award ‘ for Africa region, according to Flight Global.

The Decade of Airline Excellence Awards are celebrating the best airline stories from the decade prior to the current crisis. Ethiopian Airlines dominated the discussion among judges when it came to the Africa award. It recorded an eight-fold increase in revenues and a six-fold rise in profitability over the decade.

Source: ENA