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African Development Bank Makes History; launches US$ 2 billion 1.625% Global Benchmark

September 14, 2019

Africa’s premier development finance institution the African Development Bank has launched and priced a US$ 2 billion 3-year Global Benchmark bond which will be due by 16 September 2022. This is the Bank’s first US$ benchmark of the year. The Bond which was launched on September 11 is the Bank’s second Global Benchmark of 2019, following the EUR 1 billion 10-year priced in March 2019. This has brought the amount raised by the Bank to US$ 4.4 billion and executed 61% of its borrowing program for the year.

Hassatou Diop N’Sele, Treasurer of the African Development Bank

This very transaction received strong support from investors globally which is a sign of level of confidence investors have on the Bank as its order books has reached US$ 2.8 billion with 53 investors participating. This high quality of the order book is illustrated by the strong participation of Central Banks and Official Institutions, taking 64% of the allocations.

The African Development Bank is taking advantage of favorable investor sentiment post summer break to access the 3-year tenor, in spite of volatile market conditions ahead of the Fed Meeting the following week. The mandate was announced on Tuesday, September 10, with Initial Pricing Thoughts of Mid-Swaps + 13 basis points (bps) area.

The transaction met strong interest from the outset, with Indications of Interest in excess of US$ 1.8 billion (excluding Joint-Lead Managers interest) when order books officially opened at 08:00 London time the following morning, with initial price guidance of Mid-Swaps + 13bps area.

Momentum continued throughout the European morning, with orders in excess of US$ 2.5 billion around 11:20 London time. At this time, final pricing was set at Mid-Swaps + 13bps. Following the close of the order book in the US, the size of the transaction was set at US$ 2 billion by 14:20 London time.

The transaction was priced at 16:24 London time with a re-offer yield of 1.679%, equivalent to a spread of 8.75bps vs UST 1.5% 15 September 2022, the issuer’s tightest print vs US Treasuries to date.

Speaking of the development, Hassatou Diop N’Sele, Treasurer of the African Development Bank said that the Bank is delighted with this successful dollar Global Benchmark, and particularly pleased by both the very high quality of the order book and the solid participation of African Central Banks. The African Development Bank achieved its tightest ever spread to US Treasuries, and grateful to her investors across the world for this outcome, and the financing it will bring to the African continent.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

South African Startup Digemy raises R1m In New Funding Round Now Valued at R40m

This year, African edutech startups have seen much of investment, compared to their counterparts in fintech, logistics or transport. Cape Town-based edtech startup Digemy seems to be the latest on the scene. The startup has now raised R 1 million in new investment, bringing its total valuation to R40-million.

Here Is The Deal

This is the second round of funding and it came from Greenwold Capital.
The latest investment follows a R2-million investment previously made by Greenwold Capital in the startup in 2017.
However, this would be the end of the road for Digemy’s co-founder Carl Wallace, who Digemy CEO and co-founder Kobus Louw said had been replaced on the startup’s board by an investment representative after Wallace was diagnosed with lupus and Crohn’s disease.
With the recent investment Greenwold Capital now holds a slightly smaller stake, of 24.4%, while Digemy CEO holds a 48.9% stake and Vigo, which allows users to create their own websites, holds the remaining 26.7%.
Wallace’s stake in Digemy was formerly represented by Vigo (which has two tech subsidiary companies — Digital Drawing Room and Wapp).
However effective from 1 September, Wallace was replaced on Digemy’s board by Stocks & Strauss director and co-founder Wayne Stocks, who has previously helped SA tech startup JUMO to expand in East Africa.
Louw said the funding from this second round will be used to expand the Digemy team, launch the besmarta financial literacy platform, and to pursue entrepreneurial development.

What Digemy Does

Digemy was founded in 2016 by Wallace and Louw. The startup’s platform provides corporates with in-depth insights into the knowledge levels of employees, from course-level to the most granular level of every syllabus. Training material is delivered in bite-size chunks.

Despite the disruption around Wallace’s departure, Louw said the startup had signed four listed companies as clients, and had grown its valuation five times in the last 18 months. It has also just finished a proof of concept with one of the top banks in South Africa.
While he could not reveal who the bank was, he said the listed companies include pharmaceutical giant Cipla and Transaction Capital’s software firm Principa. The startup is currently working to conclude a deal with Deloitte too, he added.

Last year, Digemy placed in the top five for the Best Enterprise Solution at the AppsAfrica Awards, won an MTN Business App of the Year award for their besmarta financial literacy solution, and has now been named the second best tech start-up in Africa in 2019, according to Africa Tech Week.
The company has also partnered with Kevin Horsley, New York Times best-selling author and the World Record Holder for the matrix memorisation of 10 000 digits of Pi.
Through this partnership, the startup hopes to develop and launch an app that helps children memorise times tables.

Read Also: Orange Telecommunications Opens Digital Centres Across Africa

Digemy is currently partnering with corporates to roll out its besmarta platform in their organisations.
The platform provides learners with access to microlearning modules and quizzes on financial literacy that aim to decrease financial stress and help them gain financial independence.
The startup is also helping organisations to create their own online academies to assist in employee and consumer education solutions. They also create specialist courses and offer their platform as a SaaS solution.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Kenya ’s Largest Bank Enters Asian Market In A Deal With Japan’s SMBC

In this latest move, Kenya’s largest bank KCB will be looking to build one of the most significant banking bridges between Asia and Africa as well as position Kenya as a strong financial center in East Africa. KCB has just sealed a deal with the Sumitomo Mitsui Banking Corporation (SMBC), a multinational banking and financial services company in Tokyo, Japan aimed at driving cross-border trade between both countries. Kenya-based giant lender KCB hopes to be getting access to service clients in Japan through the agreement.

“We believe that new business opportunities will arise from the rapid economic development in Kenya and therefore seek to areas of mutual partnership to support such development, utilizing the product capabilities and global and local network of both banks,” KCB’s Group Director for Regional Businesses, Paul Russo said in a statement yesterday.

Here Is All You Need To Know

Under the deal, KCB will provide banking services such as banking accounts and cash management, trade finance, export credit agency finance, and treasury-related products to clients introduced to it by SMBC.
On the other hand, the deal will further strengthen SMBC’s coverage in Africa. According to the Managing Executive Officer & Head of EMEA Division at SMBC, Tetsuro Imaeda, cooperating with local financial institutions in Africa is “indispensable” for the giant Asian lender to expand its Africa business and responding to customer needs.

“By signing the agreement between one of our most important partners in Africa, KCB, SMBC will be able to support our client’s business to East Africa through (a) wide range of coverage of KCB in the areas and expects to further strengthen (the) existing strong relationship,” Imaeda added.

The pact between the two banks, reportedly the largest in their respective regions, was signed on the sidelines of the 7th annual SMBC Africa Summit held in Yokohama last week. It will see both lenders expand their financial offerings provided to clients in both East Africa and Japan, thereby enabling more cross border trade flows.

The Key Take-Away From This Agreement

For KCB, gaining such access to serve the Japanese market is a major step in its expansion drive. News of the partnership with SMBC comes just a week after the Central Bank of Kenya approved the takeover of state-owned National Bank of Kenya (NBK) by KCB Group.

Russo added KCB expects to “open up the East African market to the Asian market especially in the trade and motor vehicle industry.”

In a statement, the apex bank had said the acquisition will “strengthen both institutions leveraging on their respective well-established domestic and regional corporate, public sector and retail franchises.”

Partnering with SMBC now positions the bank for a major expansion of portfolio and an increase its global business operations, Russo added.

About KCB Group

KCB Group is a Kenyan non-operating holding company that owns banking subsidiaries in the East African region. In addition, the Group owns non-banking subsidiaries including KCB Insurance Agency, KCB Capital, and KCB Foundation. KCB Group oversees operations of KCB Bank Kenya Limited and all other subsidiaries

The bank works with several multinational companies in different industries and hopes to use the collaboration with SMBC to expand its play in facilitating business in Africa. Apart from Kenya, the lender currently has operations in Tanzania, South Sudan, Uganda, Rwanda, Burundi, with a representative office in Ethiopia.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

South Africa’s Kingson Capital Grows Its VC Fund To Over R1.4bn With Additional Capital

September 13, 2019

Durban based venture capital (VC) company Kingson Capital yesterday announced that it had raised an additional amount in capital from US investors, to bring its $30-million (R400-million) Kingson Fund Two announced earlier this year, to $100-million (over R1.4-billion).
When it was announced in February, Kingson Capital founder and managing director Gavin Reardon said the fund would invest in 30 to 50 tech startups and black-owned small businesses (see this story).
Reardon (pictured above) told Ventureburn today that the new capital has allowed the fund to increase the ticket size of investments and as a result the fund is now looking to invest in 60 to 80 tech startup and black-owned small firms.
He said fresh capital has come from US investors who are behind digital investment platform Stat Zero.
He also stressed that the fund has not as yet closed to investment.

Kingson Capital has raised an additional R1bn from US investors, to bring its fund to a total of over R1.4bn

The fund is currently conducting due diligence on various possible investments, including both late-stage and early-stage startups, he said, adding that a “healthy” proportion of these include black startups.

‘Capital to fund innovation, impact’

Commenting in a statement yesterday, Stat Zero co-founder and CEO Marquis Cabrera said the investment platform is committed to bringing together innovation and emerging technology, with impact, to enact global change.
“Our investment into Kingson’s Fund Two reinforces this mission to evoke change for the better on a significant scale, which will help increase South Africa’s GDP by enabling global market access to Silicon Valley, California and U.S. markets and capital to grow and scale SMMEs in South Africa,” he said.
In addition, Kingson earlier this year also secured a $10-million loan portfolio guarantee facility from the US government through the US Agency for International Development (USAID). The guarantee is a risk-sharing facility on debt issued by Kingson, which is supported by the US Treasury.
Reardon confirmed today that the facility forms part of the $100-million figure for the fund.
In Kingson Capital’s first fund (Fund One — see the portfolio here) the VC invested in 10 companies including Finfind – a matching platform for lenders and businesses seeking funding, Spazapp – an online ordering system for the informal marketplace (see this story) and Healthcloud – a data aggregator in the healthtech space.

10 startups selected for US bootcamp

Meanwhile, Reardon told Ventureburn that the fund, together with Cape Town based accelerator Akro Accelerate has identified 10 startups that have preliminary been selected for a two-week bootcamp in the US in November.
He said representatives from the accelerator and fund met with 10 startups on Tuesday (10 September) and that a list of those who will be selected to attend the bootcamp will be finalised shortly, he said.
It follows a pitching event held last month in Cape Town to select the 10 startups

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

BREXIT: Britain Signs Deal With SADC Countries

In preparation for the unforeseen circumstances that may herald its exit from the European Union, The United Kingdom have started wooing African countries, making concessions aimed at consolidating its traditional markets, while seeking ways of establishing new ones. To this end, the United Kingdom has commenced an Economic Partnership Agreement with the Southern African Customs Union and Mozambique (SACU+M) which will allow business to keep trading freely after Brexit. This according to officials brings to an end, the formal trade discussions between the countries and the next stage will be the formal signing of the UK-SACU+M Economic Partnership Agreement.

The UK identifies this market within the southern African region as a very important market for UK exports especially machinery and mechanical appliances valued at over £409 million in 2018, motor vehicles worth £335 million, and beverages including whisky worth £136 million.
Sources that are in the know of the agreements say that the agreement will allow businesses to continue to trade on preferential terms with South Africa, Botswana, Lesotho, Namibia, Eswatini and Mozambique. Add to that, it will supports the economic development of these Commonwealth partners laying the foundations for new trade and investment in the future.The Agreement will also help to strengthen further the trading relationship between the UK and the countries which is presently put at £9.7 billion using the 2018 figures.

With this development, consumers and businesses in the UK will continue to benefit from more choice and lower prices on goods imported from SACU+M countries. Major imports to the UK from these countries last year included edible fruit and nuts (£547 million) and motor vehicles (£409 million). Trade continuity agreements signed cover countries accounting for £89billion of the UK’s trade. When the SACU+M agreement is signed and takes effect, this will go up to £99bn.
Speaking on the development, the British Secretary of International Trade Liz Truss noted that this trade agreement, once it is signed and takes effect, will allow businesses to keep trading after Brexit without any additional barriers. Add to that, the Agreement will equally benefit British businesses while supporting developing countries in reducing poverty through trade. The African countries are expected to use this opportunity to grow their economies, create jobs and increase incomes for their citizens.”

“This is a major milestone as the UK prepares to become an independent trading nation once again, and we are helping businesses get Ready to Trade with the most exciting markets around the world, the Secretary opined. The United Kingdom High Commissioner to Botswana Katy Ransome pointed out that this Agreement in principle demonstrates the British Government’s commitment to increasing trade with developing countries and boosting economies across Southern Africa and the UK. She added that this new agreement, once it is signed and takes effect, ensures continuity in our £9.7 billion trading relationship, allowing our businesses to continue supporting our mutual prosperity and economic development.

One of UK’s biggest conglomerates Diageo Plc commended the decision, speaking on the new agreement, Wilson Del Socorro, Global Director of Government Affairs for Diageo PLC said that Diageo warmly welcomes the news of a UK-Southern African Customs Union and Mozambique agreement in principle. He highlighted that international trade is vital to Diageo as it gives us the opportunity to reach more consumers and markets around the world. Diageo, owners of Guinness Breweries acknowledged that Africa is an important growth region for Diageo, including export markets like South Africa for Scotch whisky. Many African and UK businesses are expected to tap into this agreement to strengthen their business relationships and dealings between the continent and the United Kingdom

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

Businesses In Nigeria To Pay Extra Value-Added Tax (VAT) and New Police Fund Levy

Apart from the fact that companies in Nigeria pay a 30 percent flat-rate corporate tax and other range of taxes and levies, now added to this list are the new 0.005% police fund levy (N5 per N100,000) to be paid out of the net profits of companies, and a possible increase in VAT by 2.2 percent (now 7.5%), barring any last-minute rejection by Nigeria’s parliament.

Here Is All You Need To Know

The New Police Fund Levy

Companies in Nigeria will now have to pay 0.005% police fund levy (N5 per N100,000) out of their net profits. The Nigerian Police Trust Fund Act (the “Act”) was passed by the National Assembly in April 2019, and signed into law by the President on 2 July 2019. The Act establishes a Fund, proceeds from which will be used to train police personnel and procure security machinery and equipment.

Imposition of a levy: The Act imposes a levy of 0.005% of the “net profit” of companies ‘operating business’ in Nigeria.
Funding from Federation Account and other sources: The Fund will also consist of 0.5% total revenue accruing to the Federation Account, in addition to proceeds from grants, intervention funds, aids, donations, investment income and so on.
Establishment of a Board: The Act establishes a board responsible for administering the Fund, making investment decisions, and fulfilling other objectives of the Act.
Duration of the Fund: The Fund will be wound up 6 years after its establishment. The assets and liabilities will be transferred to the Nigeria Police Force.

The New VAT At 7.2%

Nigeria ’s Federal Executive Council also approved 7.2 per cent as new Value Added Tax rate for the country, up from the current five per cent.

Although a definite decision has yet to be taken as to the effective date of the new rate, Nigeria’s Minister of Finance, Budget and National Planning, Zainab Ahmed, who spoke with State House Correspondents after the FEC meeting in Abuja, said consultations were in process over when the new rate would apply.

However, the first hurdle the new tax regime will face would be in Nigeria’s parliament which is either expected to approve or reject the proposal. Nigeria’s VAT Act would also have to be amended by the National Assembly before the commencement of the new rate. Already, the Ministry of Finance has hinted effective date to be sometime in 2020.

“We are proposing and council has agreed to increase in the VAT rate from five per cent to 7.2 per cent,’’ she said.

“This is important because the Federal Government only retains 15 per cent of the VAT; 85 per cent is actually for the states and local governments.

“The states need additional revenue to be able to meet the obligations of the minimum wage.”

“This process involves extensive consultations that need to be made across the country at various levels and also it will involve the review of the VAT Act. So, it is not going to be implemented immediately until the Act is reviewed, ” she added.

The Implication of This

Of course, once the old VAT Act is amended, and the new rate becomes effective, the new rate will automatically be applicable to online transactions carried out in Nigeria. Nigeria ’s Federal Inland Revenue Service, the national tax agency has recently announced that digital tax will become effective January, 2020. This is expected to discourage online transactions and shrink the purchasing powers of Nigerians in a country where the gdp per capita is still less than $2000 ( one of the lowest in the world) and over 86.9, representing 50% of the population are still living below the global poverty line (the worst in the world).

Read also: 45 Million Nigerians Set To Be Taxed For Every Online Transaction

African countries generally have an average VAT rate of about 15 percent, the Americas and Oceania have an average rate of 13 percent, and Asia has an average VAT rate of 12.3 percent. VATs are as low as 5 percent in countries such as Canada (federal only), Taiwan, and Zambia, to as high as 27 percent in Hungary. The average VAT rate in Europe is 20 percent, about 5 percentage points higher than the global average. However, the average European corporate income tax rate is 18.7 percent, which is lower than the worldwide average of 22.8 percent. From the above facts, Nigeria alone would have the highest corporate rate in Europe were it a European country. In a bit, Europe’s average VAT rate is justifiable because of its low corporate tax regimes. To worsen situation, African countries have one of the lowest industrial outputs across the world.

Again, although the 0.005% (N5 per N100,000) police fund levy on the net profits of companies may not be very significant, it however places additional tax burden on corporate taxpayers.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Egypt Is Setting Up 7 Technology Parks Across The Country And Launching A $50m Fintech Fund

Egypt ’s Central Bank is set to launch a fund to support fintech startups early next year with a capital of $50–100m. Also, the Egyptian government plans to set up seven technological parks this year in various universities at an investment of EGP 1 billion ($60.8 million), in its drive to foster digital technology infrastructure.

Here Is All You Need To Know

According to Egypt’s government, the parks will be financed through Egypt’s Ministry of Communications and Information Technology’s resources in parallel with the beginning of the new academic year, Daily News Egypt reported.
The ministry is ready to contribute to the fintech fund, which the Central Bank of Egypt (CBE) plans to launch next year, if the latter requests it.
Central Bank of Egypt aims to launch a fund to support fintech startups early next year with a capital of $50–100mln, the report said.

Image result for Egypt Economy facts — click here to view source

Egypt’s ICT sector recorded 16 percent growth in fiscal year 2018/19 and the sector contributes 3.2 percent of the country’s GDP, Daily News Egypt reported citing the minister.

Egypt aims to increase investments in its ICT sector and the ministry intends to increase the ICT contribution in the GDP to reach 8 percent, the report said.

Egypt is also developing a comprehensive legislation system and framework to regulate the ICT sector, through issuing the e-commerce bill and a personal data protection law, Talaat said.

For almost 10 years, Egypt has made a dramatic leap in a number of fast-expanding startups and an amazing set of supporting institutions and communities.

In 2018, Egypt was ranked the fastest growing startup ecosystem in the Middle East and North Africa and the second largest after UAE, according to a report by start-up platform MAGNiTT.

The Egyptian government has also successfully established many incubators, providing a stepping stone for local entrepreneurs. Bedaya, TIEC — Technology Innovation and Entrepreneurship Center, and Fekretak Sherketak are the top incubators founded by the government, offering funding for new innovative ideas.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Mauritius Joins Africa Finance Corporation

September 12, 2019

The Africa Finance Corporation (AFC) has admitted Mauritius as its 23rd member nation. This comes few weeks after Madagascar joined the Corporation, becoming the Corporation’s 22nd member. The AFC, an investment grade multilateral finance institution with an equity capital base of US$1 billion, to be the catalyst for private sector-led infrastructure investment across Africa has been experiencing surging growth with a current balance sheet of approximately US$4.5 billion, making it the second highest investment grade rated multilateral financial institution in Africa.

Mauritius membership is coming at a time the southern African island nation is registering impressive economic progress across the board, including a near fivefold increase in its GDP per capita in the last 30 years. Moreso, Mauritius has consistently maintained one of the highest-ranking countries in Africa in the UN’s Human Development Index striving to move from a middle income country to a high income country. The government also said that this development is in line with the current economic strategy, titled “Achieving the Second Economic Miracle” which places high emphasis on infrastructure investment which informs the country’s identification with the Africa Finance Corporation (AFC) focus on power, transport & logistics.

With this development, the AFC is now free to start series of engagements with Mauritius and its private sector on the best ways it can contribute towards developing the country’s infrastructure, leveraging AFC’s award-winning approach to deliver high quality, sustainable infrastructure projects. Equally noteworthy is the fact that the Mauritius Africa Fund (MAF), SBM Group and AFC are in discussions currently with regards to the establishment of an Africa-focused infrastructure and industrialization fund (the Fund). The Fund, a Mauritius initiative, will seek to collaborate and mobilize funds from key institutional investors for investment in crucial infrastructure projects and facilitate the setting up of special economic zones across the African continent. It would be similar to the Nigerian Trust Fund (NTF) domiciled at the African Development Bank (AfDB).

Speaking on the development, the President & CEO of the Africa Finance Corporation (AFC) Mr. Samaila Zubairu, expressed the Corporation’s pleasure in welcoming Mauritius as a Member State of AFC. Noting that through its commitment to promoting private sector-led solutions for its development challenges, Mauritius presents an excellent partnership opportunity for AFC’s mandate to develop and finance infrastructure, natural resource and industrial assets for enhanced the productivity and economic growth of African states. He added that the Corporation looks forward to significantly contributing to Mauritius’s growth story.

It could be recalled that the Africa Finance Corporation (AFC) has an A3/P2 (Stable outlook) rating from Moody’s Investors Service and that it successfully raised US$650 million in 2019, US$500 million in 2017 and US$750 million in 2015 through Eurobonds all of which were oversubscribed and attracted investors from Asia, Europe and the USA. Combining specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital to address Africa’s infrastructure development needs and drive sustainable economic growth, the AFC has invested in high-quality infrastructure assets that provide essential services in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications in projects within 29 countries across Africa.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.

These Four African Countries Control 60 per cent of Africa ’s Digital Economy, says new report.

Africa has 54 countries but only four countries dominate the digital revolution going on in the world. According to the United Nations Conference on Trade and Development (UNCTAD) Kenya, Egypt, Nigeria and South Africa are leveraging data and various platforms to collectively control the lion’s share of the continent’s digital entrepreneurship activities.

Here Is All You Need To Know

Apart from the Kenya, Egypt, Nigeria and South Africa, six second-tier countries — Ghana, Morocco, Senegal, Tunisia, Uganda and Tanzania — make up another 20 per cent, while the remaining 44 countries in Africa account for the remaining 20 per cent.
The UN agency, however, warns that the growing digital wave on the continent could be curtailed, particularly in Kenya where the Government is looking for ways to start taxing mobile applications and internet usage.

‘‘While this kind of taxation may be attractive to governments, it can be counterproductive if it results in a decline in economic activity by reducing the number of active internet users,” says the report.

UCTAD said efforts to grow tax revenues could also hurt the growth of the growing online businesses as well as suppress start-ups.

According to the report entitled Value Creation and Capture: Implications for Developing Countries, numerous developed countries are discussing or implementing interim and permanent measures to tax the digital economy.

Read Also: Tax War On Online Businesses: Nigerian and Kenyan Ecommerce Businesses To Pay VAT

These include Kenya, Uganda, Tanzania and Zambia. In Kenya, the National Treasury has proposed imposing an income tax and value-added tax on items bought on different e-commerce platforms. The proposals, contained in the Finance Bill 2019, are currently being debated in Parliament. This is also the case with Nigeria which has proposed to tax all ecommerce companies.

Commenting on the findings, UN Secretary-General António Guterres said digital advances have generated enormous wealth in record time, but that wealth has been concentrated around a small number of individuals, companies and countries.

There Is Wide Disparity In Digital Revolution Across The World

The report also noted that the world’s top digital firms are highly concentrated geographically . Among the world’s 70 highest valued digital platforms, most are based in the United States, followed by Asia (especially China). Latin American and African digital platforms are only marginal. In terms of market capitalization value, digital platform companies from the United States increased their share in the global total from 65 per cent to 70 per cent. An analysis of web traffic data confirms the dominance of the large United States digital platform companies. The report also noted that the United States hosts more than half of the top 100 websites used in 9 of the world’s 13 subregions shown in the table. Even in Western Europe, the most-used websites are based in the United States.

Challenges Confronting Emerging Economies

The report noted that the some of the problems confronting developing economies and other entrepreneurship ecosystems include the small size and scope of their markets.

It is rare for them to be able to reach international markets. In the diverse sample used in one study on Africa, 117 out of 135 enterprises (87 per cent) targeted their domestic markets. Enterprises typically focused on using digital technologies to cater to a nearby niche market, the report notes.

Indeed, few African digital enterprises reach customers beyond the boundaries of their home city. This is because they have to engage with customers directly, and also because only customers in cities have the minimum necessary infrastructural access or technological readiness to engage with a variety of digital products, the report further notes.

The report further notes that Africa still has fewer capital and other entrepreneurial resources than any other regions in the world to boost its digital economy.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Murdoch Partners Kingdom Business Network to Empower 1,000 entrepreneurs across Africa by 2022

As part of efforts to give budding African entrepreneurs the much needed support to take their games to the next level, the Murdoch University in Western Australia is partnering with South African-based Kingdom Business Network (KBN), a programme created and funded by the South-African based the Beryl Group, to inspire entrepreneurs to create and acquire sustainable wealth, enabling them resources and training to build and develop their communities and positively impact their generation. This agreement was reached during a recent visit to Australia by Joarina Matthys, the KBN Chief Executive Officer and four of its entrepreneurs to participate in a panel at the 9th Annual Africa Australia Research Forum and meet with Murdoch Alumni, members of the Perth African diaspora and entrepreneurial community.

Founded 10 years ago by Neverl and Beryl Kambasha with a goal to empower 1,000 entrepreneurs across Africa by 2022, the Kingdom Business Network group has been deeply involved in developing quality entrepreneurs who will have a positive impact on their communities. However, all through this decade of operation, the group has been in South Africa. But with the recent development, efforts are in top gear to expand to other African countries.

Speaking on the development, the CEO of KBN said that “after 10 years of operation in South Africa we have made the decision to expand our reach, to other parts of Africa and to seek partnerships within Australia, including with Murdoch.” The Murdoch University Africa Research Group Chair David Doepel highlighted that Murdoch was keen to understand what structures facilitated creative and innovative thinking, and to harness the formidable African brain power globally.

“This is absolutely critical to Africa’s participation in the creation of the 4th Industrial revolution,” he added. He further stated that Murdoch’s digital interconnectedness holds great promise, but it only works if there are human networks formed to leverage the digital ones. This is why “we have been exploring how we can be more embedded with each other to ensure the success of this burgeoning phenomenon on the continent.”

To highlight the phenomenal growth within the continent in the last few years, he pointed out that there were just 314 tech hubs in Africa in 2016, but as at 2018, it has doubled to 618, which shows a big promise and captures the huge untapped human resource potential the continent has. More than 50 per cent of those tech hubs have incubators with in-kind support for idea and early stage start-ups, developing innovations in agtech, healthtech and fintech focused on African solutions for African opportunities. To this end, coming together to ensure the success of these entrepreneurs, and finding ways to straddle continents with ideas that lead to businesses that solve problems, exploit opportunities, create jobs and deliver inclusive growth, is the work we must support.”

Aside from other openings, The Kingdom Business Network could also provide a trusted partner for companies interested in investing in African companies or your partners in Africa. “A key role we play is developing and maintaining strategic partnerships to create a web of networks for our entrepreneurs as well as for people looking for opportunities in South Africa and Africa generally says Joarina Matthys, KBNs CEO, adding that “we understand how government and local systems work; if you don’t know who to trust we are the place to come to.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.