Governance Archives - African Financial & Economic Data

22 Jan

Zimbabwe President Seeks to Woo Lenders by Paying Loan Arrears

Zimbabwe is committed to repaying arrears to external lenders so that it can resume support programs with institutions such as the International Monetary Fund and end years of isolation from global capital markets, said the country’s president.

Emmerson Mnangagwa, the 75-year-old who took over as leader of the southern African country in November after the military pressured Robert Mugabe into resigning, said one of his priorities is reintegrating his country into the global financial system.

The economy has halved in size since 2000, credit lines from most lenders have been withdrawn and infrastructure has crumbled.

Zimbabwe owes about $9 billion to lenders such as the World Bank and African Development Bank and has fallen behind in payments, with arrears recently amounting to about $1.8 billion.

If his bid to revive the economy is to succeed, Mnangagwa will need access to billions of dollars of support.

“There are limitations to engaging with Bretton Woods institutions — the limitations are as a result of our arrears with those institutions but they are giving positive indications that they would want to accommodate us,” he said in an interview in his office in the capital, Harare, last week.

“We shall recommit ourselves to paying our debts, our arrears. I believe that they will embrace us in the same manner they are embracing other countries.”

Re-engaging with international lenders would be a first step for the Zimbabwean government, which is also considering a debut international bond sale so that it can invest in infrastructure.

“If this succeeds, we would really need a substantial injection into our economy, in particular into the productive economy,” he said.

“Basically a capital injection into capital projects. Infrastructure development is what we want: dams, roads.”

Still, the Zimbabwean leader demonstrated little appetite for cutting costs in the manner that the IMF and other lenders have urged.

The country’s more than 500,000-strong civil service accounts for about 90 percent of budget expenditure, crowding out investment in much-needed projects such as restoring the capital’s water supply and fixing its roads.

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14 Dec

Angola to Offer Grace Period to Recover Overseas Funds

Angola will set a moratorium in January to allow citizens with money abroad to repatriate their funds, as the oil-producing country struggles to ease an acute dollar shortage that began soon after oil prices dropped in 2014.

“Angolans who repatriate overseas funds and invest in the economy, companies that generate goods, services and jobs won’t be harassed,” President Joao Lourenco said Wednesday in the capital, Luanda. “No questions will be asked about why their money was abroad and they won’t face legal prosecution.”

The Angolan economy, sub-Saharan Africa’s third-largest, has been crippled by oil prices that have halved since mid-2014, causing zero growth last year, soaring inflation and a shortage of dollars needed to import products.

Lourenco, who took over as president in September after the 38-year rule of Jose Eduardo dos Santos, has promised to fight corruption in a country where his predecessor’s family has amassed great fortunes. He fired Dos Santos’s eldest daughter, Isabel, last month from her position as chairwoman of the state-owned oil company Sonangol.

Once the grace period to repatriate funds is over, the government will consider money in foreign accounts to belong to Angola and work with authorities abroad to bring the money back, Lourenco said.

“We want Angolans who have fortunes abroad to be the first to invest in the country, thus demonstrating that they are true patriots,” he said. “One must not confuse the fight against corruption with the persecution of the rich or wealthy families.”

The measure is similar to a decree issued last month by Zimbabwean President Emmerson Mnangagwa, who ordered anyone who had illegally moved cash and assets out of the country to return them within three months or face arrest.

Soure: https://www.bloomberg.com/africa

08 Dec

Ramaphosa Says S. Africa’s ANC in Challenge to Unite Party

Cyril Ramaphosa, one of two leading candidates contesting for the presidency of South Africa’s ruling African National Congress, said its leaders must unite the party after this month’s elective conference.

05 Dec

Nigeria: FG – 3,000 Nigerian Migrants Repatriated From Libya

Abuja — The federal government has revealed that no less than 3,000 Nigerians have so far been repatriated from Libya in the wake of recent slave trading in that country.

The government said only last week, 250 Nigerians were repatriated also from Libya.

Charge d’Affaires of Nigeria in Libya, Mr Illiya Danladi Fachano, made the disclosure yesterday in Abuja, while addressing the Charles Oputa, alias Charly Boy-led group, “OurMumuDonDo”, who had converged on the Ministry of Foreign Affairs, Abuja, to urge the government to act quickly in order to save the lives of Nigerians trapped in Libya.

“Good morning everybody. Like the man introducing me, I am the Charge d’Affaires. In other words, the Nigerian Head of Mission to that country. “I exist there to serve the interest of Nigerians. I am here by this opportunity you have created to tell you that the mission repatriates migrant Nigerians; every week, 250,” Fachano said.

The envoy disclosed further that another batch of 250 Nigerian migrants would be repatriated to the Nigeria tomorrow. “They are going to arrive Lagos at 7p.m. If it is not 7p.m, it is because the plane is delayed for one reason or the other,” he added.

He disclosed that the mission usually visits every week, the detention camps where illegal Nigerian migrants are detained. He added that other nationalities such as Ghanaians and Gambians, were also detained at the camps, saying that the mission visits the camps to identify Nigerian citizens and get them registered.

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15 Nov

Kenya’s Economy Could Face a Bleak 2018

Kenya is facing an economic storm in 2018 in the aftermath of two disputed elections. Saddled with the triple threat of austerity measures to pay for those votes, slowing credit growth and new accounting rules for banks, Kenya now risks missing the government’s forecast for 6 percent economic growth next year, according to lenders including Nairobi-based Stanbic Bank Kenya Ltd. Investec Bank Ltd. strategist Chris Becker says expansion could slow to as little as 1 percent.

10 Nov

Exporting to Nigeria: Tips and insights

Nigeria is still, by a slim margin, the biggest economy in Africa, despite the economic woes of the past two years. A population of anything between 180 million to 200 million people makes its consumer market in particular of great interest to investors, manufacturers and exporters around the world. The country manufactures relatively few of the products it consumes and despite efforts to increase local industry, it remains largely import dependent.

However, despite the multitude of opportunities that Nigeria presents to exporters, getting a product into the market can be a challenging exercise.

Nigeria’s main port complex is in the commercial capital of Lagos, a city of an estimated 20 million people – a major market in itself – but also the shipping gateway for imports and exports for the whole nation.

The facility, comprising the Lagos Port Complex and Tin Can Island Port in the Apapa area of Lagos city, is one of the busiest in Africa. It is also by far the main portal for trade into and out of this large country, processing 97% of containers. The only other port of size, Onne, is focused on the oil and gas industry around Port Harcourt, and there are a few other, smaller, ports.

As a result, there is usually serious congestion at Lagos. The high volumes are just part of the problem. Other challenges include poor infrastructure, inadequate and often poorly functioning equipment, the demands of different agencies located there, onerous bureaucracy and general issues related to officialdom.

Clearance time in Lagos port is between seven and 14 days. Once clearance is complete, it takes, in a best-case scenario, 48 hours to get the product out of the port. However, this can take longer depending on other factors, as currently being experienced with the rebuilding of the access road to the port, and any problems in the manifest or other documents.

Having a competent cargo clearing and forwarding company is vital to navigate the process. Exporting to Nigeria requires detailed knowledge of requirements. A simple mistake in documentation or process can lead to cargo sitting in port for weeks or even months, with hefty demurrage charges.

It is important for an exporter to be on top of any changes in documentation and import requirements. Do not wait for the importer in Nigeria to alert you to what is needed; rather do your own homework.

Aviation as a catalyst for growth in Africa

While Africa has one of the biggest populations in the world, its aviation industry is still small, representing only 2% of the global market. Despite all the major challenges ahead, this is an industry that has very big potential for future growth in Africa.

One of the reasons why African countries seem unable to attract a large amount of foreign investments, is that there is no direct airline connection to reach them. As a result, business travel and costs of doing business become prohibitive. Foreign investors are less likely to travel to distant and not easily accessible places, even if there are great opportunities. As a result, aviation in Africa should be considered a priority sector by the respective African governments so that it can boost the economic development of their countries.

Aviation as a pillar for economic growth

Being the biggest pan-African airline, Ethiopian Airlines has greatly contributed in making the Addis Ababa Bole Airport an aviation hub and a gateway to Africa. Similarly, for Kenya Airways, the Jomo Kenyatta International Airport in Nairobi is a springboard to access not only the east African region, but also the central and western part of Africa. As for South African Airways, from its Johannesburg base at OR Tambo International Airport, it covers most of the southern African region. Except for South Africa, where its economic growth stagnated in 2016 and eventually fell into recession in the first quarter of 2017, Ethiopia and Kenya grew at a very fast rate of 7.5% and 5.8% in 2016
respectively. In the north, Casablanca, Algiers and Tunis are the major gateways for Europe to access both the Maghreb region and the western African region.

As for the Middle East countries, Cairo is the major gateway to access the major African cities in the northern, eastern and western regions. All these aviation hubs in Morocco, Algeria, Tunisia and Egypt have contributed to the high growth rate of passenger traffic, increasing by 94%, 95%, 75% and 108% respectively from 2005 until 2015, according to data from the World Bank. Aviation is the critical link that not only connects Africa to the world, but also builds bridges among the various African countries. It is only when there are better airline connections, enabling the movement of goods and people, that business activities can flourish. With lower business travel costs, countries can then better attract foreign investors and create better business opportunities.

According to the United Nations Conference on Trade and Development (UNCTAD), the top-five African countries that had the biggest stock of foreign direct investment (FDI) in 2016, are South Africa, Egypt, Nigeria, Morocco and Angola, with US$136.8bn, $102.3bn, $94.2bn, $54.8bn and $49.5bn respectively. Of the five countries, only South Africa, Egypt and Morocco have a major national carrier.

05 Oct

For many African Businesses There Is a Brexit Upside

African economists and bankers expect more advantageous trade terms, possibly with both the UK and the European Union, after last year’s shock decision to leave.

“For the ordinary African, Brexit is pretty much irrelevant,” says Diane Karusisi, chief executive of Bank of Kigali in an interview with Euromoney Africa.

Diane Karusisi, Bank of Kigali But bankers and people in business across the continent have been thinking hard about Brexit in the year or so since the referendum and while they may disagree over what form Brexit is likely to take, many expect the UK’s split from the European Union to create business opportunities. Once Britain leaves the union, it will have no trade agreements either with individual African countries or with regional African blocs, as British trade had been governed by EU law. That gives Africa an opportunity to renegotiate the terms of its partnership with the UK.

Brexit may also, some say, embolden Africa to negotiate fairer trade terms with what remains of the EU. Criticism Trade terms struck between Africa and foreign parties, including Europe, have come in for criticism. Hippolyte Fofack, chief economist at Afreximbank, says he is no fan of the Economic Partnership Agreements (EPAs) that the EU wants to sign with regional groups in Africa. “The moment Brexit happened, I felt that actually it would provide an entry point to renegotiate the EPAs,” he says.

The EPAs require both parties to open their markets: while this may benefit African economies to some extent, European exporters are likely to be the biggest winners as they could stifle or crush young industries on the continent. The EU has already signed such a deal with six countries of the Southern African Development Community; another, with the East African Community, is in the doldrums. Many in Africa hope that countries in the region will be able to strike new, more advantageous deals after the clean slate for trade terms with the UK and an EU weakened by the loss of one of its largest economies.

15 Sep

Egypt is making renewed efforts to reform its economy

Privatisation has a bad reputation in the country but the government is giving it another go for its economy. THE train north from Cairo winds through the lush fields and meandering canals of the Nile Delta, before chugging into Alexandria. The scenery is pleasant on a 180km journey that can drag on for more than four hours. It is slow enough that EgyptAir offers flights on the same route.

Egypt’s state-owned, 6,700km rail network, the oldest in Africa, has seen better days. Stations are dingy; trains are dangerous and often delayed. In August 41 people were killed in one collision. It was the deadliest crash since 2012, but smaller ones are common, with over 1,200 last year alone. (Britain’s rail network, with three times as many passengers, saw about 750.)

Days after the accident the transport minister said that he would bring in the private sector to improve quality and safety. His ministry is drafting a law to allow private firms to run trains and stations. If it passes, it would be the clearest sign yet that Egypt is serious about reforming its top-heavy economy.

The state has played an outsized role in business since the coup in 1952 that created the modern republic. It ran factories, banks, utilities and even newspaper publishing houses. At one point more than half of Egypt’s industrial production and 90% of its banking revenue came from the public sector. This socialised economy helped create an urban middle class. But by the 1970s it had become bloated and inefficient. Anwar Sadat, then president, had limited success encouraging private investment with his infitah (“openness”) policy.

His successor, Hosni Mubarak, oversaw a real shift. In 1991 his government picked 314 public companies to privatise. They employed 1m people and generated more than 60bn Egyptian pounds (then $21.4bn) in annual revenue, about 15% of GDP.

22 Aug

Nigeria: Government Joins 71 Countries to Combat Tax Evasion

Lagos — Nigeria has joined 71 other countries to combat tax evasion as the Federal Inland Revenue Service has signed two major multilateral instruments.

These instruments are the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) and the Common Reporting Standard (CRS) Multilateral Competent Authority Agreement‎ (CRS MCAA).

Chairman, Mr. Tunde Fowler, Executive Fowler signed the agreements on behalf of Nigeria in Paris, with Mr. Ben Dickinson, head of global relations and development division of the Organisation for Economic Cooperation and Development (OECD), in attendance.

A statement issued by Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration (CTPA), said the signing of the agreements makes Nigeria the 71st jurisdiction to sign the MLI and the 94th jurisdiction to join the CRS MCAA.

The agreements will give Nigeria automatic exchange of tax and financial information among 101 tax jurisdictions and enhance the country’s ability and those of the other countries to contain tax avoidance and evasion as well as share financial data.

The MLI is a legal instrument designed to prevent Base Erosion and Profit Shifting (BEPS) by multinational enterprises. It allows jurisdictions to transpose results from the OECD/G20 BEPS Project, including minimum standards to implement in tax treaties to prevent treaty abuse and “treaty shopping”, into their existing networks of bilateral tax treaties in a quick and efficient manner.

The text of the MLI, the explanatory statement and background information are available on OECD website along with the list of the 71 jurisdictions participating in the MLI and the position of each signatory under the MLI.

The CRS MCAA is a multilateral competent authority agreement based on Article 6 of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which aims to implement the automatic exchange of financial account information pursuant to the OECD/G20 Common Reporting Standard (CRS) and to deliver the automatic exchange of CRS information between 101 jurisdictions by 2018.

The text of the CRS MCAA, background information and the list of the 94 signatories are available on OECD website. Saint-Amans explained that the agreements will provide “automatic exchange of tax and financial information among 101 tax jurisdictions and enhance the ability of countries to contain tax avoidance and evasion.

It would be recalled that Fowler has said with the introduction of Voluntary Assets and Income Declaration Scheme (VAIDS), no Nigerian can evade tax payment.

According to him, the board has received positive response so far on the scheme. To improve tax compliance, the Federal Government said tax offenders stand to enjoy 29 per cent waiver on overdue taxes if they take advantage of VAIDS. The VAIDS programme is aimed at reducing tax payers’ liability and creates more awareness on the statutory function of every working citizen to pay tax.

The scheme which started July 1, offers a window for those who, before now, have not complied with extant tax regulations to remedy their positions by providing them limited amnesty to enable voluntary declaration and payment of liabilities.

source from allAfrica