News - Afrikan Heroes

African Leadership Should Adopt Innovative Thinking in Job Creation

September 15, 2019

Intellectuals and experts in the field of human resource management from across Africa have urged African leadership to adopt a more innovative approach in efforts at tackling unemployment in the continent.

This becomes necessary as innovative thinking about Africa’s conventional employment issues is what takes centrestage at the African Development Bank’s new policy research document titled:Creating Decent Jobs: Strategies, Policies, and Instruments.

The report which elicited strong presentations and debate during the Report Launch in Abidjan Cote d’Ivoire attracted senior management of the Bank, diplomats, staff, and media representatives.

Speaking at the event, Mr. Charles Boamah Senior Vice President of the Bank pointed out that the issue of employment is “at the top of the agenda of every African leader”, and said that the report was “the first of its kind in challenging and unveiling some of the misconceptions that many experts have about the nature of under-employment and unemployment in Africa.

“The report signals the start of some fresh thinking about the nature of employment creation on the continent and clarifies which development strategies and policy interventions are needed for low-income countries in Africa”, Boamah said. He went on to predict that the report would “serve as a reference document on employment in Africa for some years to come”.

Introducing the report, Celestin Monga, the Bank’s Chief Economist, remarked that part of its appeal was in applying innovative thinking to conventional employment issues. For example, one problem identified was that domestic economic progress was often assessed by the allocation of public funding to priority sectors or by analyzing the number of reforms carried out to improve the business environment. In this context, he observed that several of the world’s top-performing countries had low rankings for the ease of doing business.

He also remarked that the official unemployment figures of many African countries were so unrealistically low that policymakers found it difficult to explain how demand for labor in markets was so buoyant.

Africa was also the world region with the highest proportion of its workforce in vulnerable employment, which served to hide rather than clarify the essential issue of employment in Africa. A new model for measuring employment that related to actual conditions in Africa was needed, he said. The report should also be seen as a manifesto for African jobs.

Finally, he praised the painstaking work of his co-editors, and particularly recommended a focus paper written by Andinet Woldemichael, principal research economist, entitled “The Missing Women in African Labor Markets” in the report.

In the face of rapidly growing populations and heightened risks of social unrest or discontent, jobless growth was the most serious concern for African policymakers, said Abebe Shimeles, manager in the Chief Economist’s complex, who spoke on the highlights of the report. “One problem”, he added, “was already well known – that employment and unemployment needed to be more closely defined in their relative context, a task that had already caused difficulties in other development finance institutions.

Traditional labour market economists were not capable of accurately defining the particular African employment phenomenon”. In addition, he pointed out that the status of the ministries of work or labour in many African countries was often not important enough to be considered as a critical policy sector, reflecting the low priority given to making a serious difference to the continental employment challenge facing all the African countries.

Reacting to the issue of unemployment in Africa, the Minister of Youth Promotion and Employment of Cote d’Ivoire, Mr. Mamadou Toure highlighted on the interconnections that existed around the jobs issue pointing out that “this cannot be resolved on its own, and certainly not without considering carefully other related aspects, such as skills, education, training, enterprise and social services”.

Professor Tchetche N’Guessan, of the University of Felix Houphouet-Boigny, Cocody, Cote d’Ivoire; and Mr Freddy Tchala, CEO of MTN in Cote d’Ivoire. Also spoke, discussing different aspects of employment, education, training, skills and government measures for the promotion of youth entrepreneurs.

This Report,its promoters say would be of immense assistance to government and the private sector alike in understanding the dynamics of Africa’s job market and also help in fashioning out modalities towards finding solutions to it.

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.

G5 Sahel Heads of State Support Desert to Power Initiative

The Group or Five (G5 )Sahel heads of state have thrown their weight behind the Desert to Power, an Africa Development Bank led initiative aimed at providing electricity to the region. This was agreed on during the G5 Heads of State summit in Ouagadougou, capital of Burkina Faso on Friday.

This is based on the belief that one of the major factors responsible for the worsening security situation in the region is growing poverty, and the absence of opportunities for people to make a living from. This frustration is fuelling most of the banditry in the region, thus improved infrastructure like energy would make huge impact, analysts say.

President Christian Kabore of Burkina Faso.

The summit, “Harnessing solar energy for the socio-economic development of the G5 Sahel countries” came on the heels of a high-level technical meeting attended by Ministers of Energy from across the Sahel region, and development partners including the World Bank, and regional institutions such as the West African Economic and Monetary Union and ECOWAS.

Equally in attendance is the former British Prime Minister Tony Blair, who participated as the Executive Chairman of the Tony Blair Institute for Global Change. He also endorsed the initiative.

Speaking on the development, the President of the G5 Sahel President Christian Kabore of Burkina Faso urged the private sector to support the Desert to Power and underscored the strategic and critical role of power provision in the Sahel region.

The President further noted that “the African Development Bank is our bank and the private sector must be involved in this important initiative for our countries. I have no doubt that with technical leadership of the AfDB, we will be able to mobilize the necessary funds. Access to electricity is key for the economic development, prosperity and security of the G5 Sahel countries” Kabore said at a joint press conference hosted with the President of the African Development Bank.

The goal of Desert to Power is to propel the Sahelian economies to higher growth and prosperity.

Adesina outlined the initiative’s ambitions of providing 10,000 MW of solar-generated electricity to 250 million people across the Sahel.

“The African Development Bank is fully ready to work with all partners to make this Baobab of Energy a success. Your strong political support and policies to make solar energy affordable across the Sahel will be critical,” Adesina said.

“Generations of people in the Sahel have waited for light for too long. Generations today and in the future can wait no longer! The time for action is now. The time for Desert to Power to provide electricity for all in the Sahel is now,” he urged.

G5 Sahel heads of state acknowledged that limited energy access and a dependence on fossil fuels underscores the necessity of an energy shift and the need to accelerate the economic development of the region and ensure its stability.

Five priority areas for the G5 Sahel include expanded utility-scale solar generation capacity; extending and strengthening power transmission networks; accelerating electrification through decentralized energy solutions; revitalizing national power utilities; and improving business climates for increased private sector investments.

A joint Task Force and a coordination unit, to be hosted by the African Developmemnt Bank, will be set up to improve legal and institutional frameworks, to ensure that priority in energy provision is given to rural communities.

Donor and development partners were asked to help mobilise $140 million for the initiatives project preparation phase.

Desert to Power has already galvanized huge political support at the global level. during the recent G7 Summit in Biarritz, France.

The Desert to Power initiative covers 11 countries: Burkina Faso, Eritrea, Ethiopia, Mali, Mauritania, Niger, Nigeria, Sudan, Djibouti, Senegal and Chad and is in line with the United Nations Sustainable Development Goals, the Paris Climate Agreement and the Renewable Energy Initiative for Africa.

“If the Sahel is blessed with this super abundant natural resource, it simply means God intended for us to have electricity. 100% through the sun. it is, therefore, time to turn the Sahel’s largest natural resource – the sun – into the most powerful driver of its growth and prosperity. That is why we are here,” Adesina said.

The Biggest Internet Company In Europe Is Now Owned By Africa ’s Most Valuable Company

September 14, 2019

This is a big shot from Naspers, Africa ’s most valuable company, which in terms of GDP, would be richer than the West African country of Liberia. In its latest move, Naspers has listed its international internet assets on Amsterdam’s stock exchange. By doing so, it has carved out the biggest consumer internet company in Europe.

“There’s this great pent-up demand for great technology and internet companies,” Naspers CFO Basil Sgourdos said. “We’re now the largest — we’re actually three times larger than the next biggest tech company and that will attract lots of interest”.

Here Is All You Need To Know

On the Euronext Stock Exchange, Amsterdam Netherlands, Naspers’ new company is called Prosus. This week, upon listing, it got a valuation of $105 billion. By far, these figures have now made it the largest ever Europe ‘s consumer publicly listed internet company. Far off the tech board on the exchange, overall, Prosus is now the third most valuable company listed on the Euronext exchange in Amsterdam.
Each of the company’s shares soared as much as 29% on its first day of trading.
Naspers is smarter anyway; it is only floating 27% of Prosus, holding onto the remaining 73% stakes.
Apart from Prosus, Naspers owns a third of Chinese tech giant Tencent. Its stake in Tencent is valued at $130bn.
Prosus is holding many Naspers’ assets including Naspers’ Tencent stake as as well as investments in Swiggy, the Indian e-commerce startup and Mail.Ru, a major Russian internet platform.
Naspers’ smart international moves include more than doubling its $616 million investment in Flipkart, the Indian e-commerce company, when it sold its 11% stake for $1.6 billion last year.
Prosus will trade on Euronext with “PRX” as its ticker.
Prosus also houses Naspers other inter assets, which include all of its interests in online classifieds, food delivery, payments, etail, travel, education, and social and internet platforms sectors. Apart from Tencent, these include mail.ru, OLX, Avito, letgo, PayU, iFood, Swiggy, DeliveryHero, Udemy, eMAG, and MakeMyTrip.

Why Is Naspers Listing All of These Assets In Amsterdam, Netherlands?

Naspers reasons for listing all of these assets may not be unconnected with its size on the Johannesburg Stock Exchange (JSE), where asset managers were cautious about their exposure to a single share.

Listing on Euronext, Amsterdam will therefore give the internet giant an opportunity for “opening up investment to a broader category of investors,” says CEO Bob van Dijk, while diminishing the valuation gap between Naspers and Tencent.

From A South African Newspaper Publisher To A Global Brand

Naspers’ success stems from a vertical change in strategy. Originally a newspaper publisher, Prosus’ listing comes as part of its long-term strategy to transform the century-old newspaper publisher into “a global consumer internet company.”

The net effect of the Prosus listing will also be felt in South Africa as it trims Naspers’ weighting on the Johannesburg Stock Exchange to 15% — down from around 25%. Being listed only in South Africa had limited Naspers’ pool of accessible capital and its dominance on the local stock exchange also constrained local investment managers.

From the pie chart above it is clear that majority of revenue for Naspers comes from Internet services, which contributed 69.34% to NPN’s revenue, second biggest revenue earner was E-commerce with 15.2% or $1.987 billion dollars followed by video entertainment, with 14.1% or $1.834 billion.

In a more strategic move, earlier this year, Naspers appointed Phuthi Mahanyele-Dabengwa, 48, as its new chief executive of its South African unit. This appointment makes her the first ever female and first black chief executive of the 104-year old company. Mahanyele-Dabengwa, previously chief executive of Shanduka Group, an investment company founded by Cyril Ramaphosa, president of South Africa, will lead Naspers’ drive for major African tech startup wins with a $314 million fund announced last October.

She will also oversee Naspers Labs, a social impact and skills acquisition initiative for South Africa’s unemployed youth, and to Bob van Dijk, group CEO of Naspers.

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.

President Weah Plans to Print New Currency Notes

The Liberian President George Weah has mulled plans to print new currency notes worth about L$ 34 Billion in line with advice from the Central Bank of Liberia.The decision according to government sources is aimed at stemming the runaway inflation the Liberian economy is facing presently. The Central Bank of Liberia is said to have informed the President advising that the Liberian economy may be in serious problem if nothing is done urgently. This is because of the high rate of unaccounted local currency infused into the economy that is causing high inflation, thus the recommendation for the printing of new local currency to replace existing ones.

Observers say that President Weah’s quest to print new bank notes may not be unconnected with the controversies trailing the country’s financial system especially the central bank due to the issues relating to the executives of the apex bank who were facing trial for illegally printing over L$16 billion during the regime of former President Ellen Johnson-Sirleaf.

While notifying the country’s Senate about the decision, President Weah notes that “the decision needs to be made now to address this issue that impacts the economy, it is important to note that the printing of new banknotes will require your approval, in accordance with Article 34(d) through the 1986 Constitution,” he added. Though the CBL has not defined any set values or pattern to limit the printed amount of currency (new money), it should be enough to provide services, transfer goods and also regain the value of currency that is in circulation.

President Weah told the Senate that in view of the Central Bank’s advice, it became imperative to discuss the matters with the apex bank for their approval to on the way forward to enable the CBL to move in a timely manner to conclude arrangements for the printing of the [new] currency. After the president’s address to the Senate, a motion was moved to direct the Senate committee on Banking and Currency to appropriately advise plenary.

Critics however, say that the problem plaguing the Liberian economy is beyond printing of a new currency, the challenges are mostly fiscal indiscipline thus printing of new bank notes may not have the desired effects. Moreso, there are allegations that President Weah’s notification to the Senate was simply a window dressing because the apex bank already had the new currency printed. This claim could not be independently verified as at the time of going to press. Whether the printing of the new currency would help address the challenges being faced by the country is left to be seen.

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.

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

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.

BREXIT: Britain Signs Deal With SADC Countries

September 13, 2019

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.