Effective from January 2020, businesses in Zambia would no longer pay tax on goods and services supplied or imported into the country under the old Value Added Tax Act, but will now do so under the new Sales Tax. And this will come at an extra cost.
Here Is What You Need To Know About The New Sales Act
The Sales Tax will replace the current Value Added Tax (VAT) Act.
The Sales Tax Act will apply to the taxable supplies of good and services. Sales Tax will also apply to the taxable importation of goods and services into Zambia.
The rate of tax is 9% for locally supplied goods and services and 16% for imported goods and services. The Minister is empowered to reduce the rate applicable to a taxable supply by Statutory Instrument.
The Act retains most of the principles that applied under the VAT Act with respect to definitions of supplies, goods, and services. It also largely retains the definitions of time of supply and place of supply. As with the current VAT Act, the return filing deadline remains the 18th of each month.
Exemption
Under the Act, the following goods and services are exempted from sales tax:
Capital goods
Inputs
Designated basic and essential goods or services
Designated suppliers to privileged persons
Exports
The Act also empowers the Minister to provide exemptions to Sales Tax by means of Statutory Instrument.
The Significance of The New Sales Tax To Zambian Businesses
This new Act is so significant for Zambian businesses because, under the old VAT system, consumers used to pay 16% regardless of the value chain. Under the Sales tax regime, the longer the value chain, the higher the tax paid.
Here Is An Example
Under the new sales tax regime, if a Zambian manufacturer imports raw materials from South Africa, for instance, he will pay 16% because from the new law, 16% is payable as sales tax on all goods imported into Zambia. However, when he/she sells to a wholesaler, 9% local sales tax will be levied on that sale. Again, when the wholesaler sells to a retailer, 9% will also be levied. Should the retailer also sell to the final consumer, 9% will also be charged as sales tax?
The implication of this is that Zambia’s final consumers — the farmer, villagers, informal sector worker — will be paying 41% tax instead of 16 % VAT previously the case. In the case of certain Zambian workers who are paying under Pay and As You Earn (PAYE) at the top rate of 35%, the total effective tax on their income would now be 76% without taking into account other levies.
The new sales tax has been criticized as being against the social, economic and political good of Zambians.
“VAT works better when you have an economy that has a strong manufacturing base. But we don’t have it! We are in constant refund and it cannot work now. We have to grow the manufacturing base because that is the sector that needs that support of a VAT refund. Right now, VAT is a subsidy and we are in austerity — we can’t afford subsidies. It is as simple as that.
The VAT system was introduced 23 years ago in 1995 to replace Sales Tax.
For Foreign Investors and Businesses
When the new Zambian Sales Tax Act comes into force in 2020, Zambia will be the only country in Southern African Development Community and possibly in the Common Market for Eastern and Southern Africa region to have a sales tax system and this may influence foreign investors in their decision to locate their companies. The country may likely be less competitive a destination for foreign investors compared to its neighbours.
Why 2020 Is The New Date And The Implication of This For Businesses
The new date for the Sales Tax Act, according to Zambia’s Finance Minister Bwalya Ng’andu is to allow for further refinement of the law.
Addressing parliament, Ng’andu said he was withdrawing the draft law and would re-introduce it in the next session in September, the ministry of finance said in a statement.
“This will allow for sufficient time to address the concerns in the Sales Tax Bill that stakeholders raised,” Ng’andu said.
Since being appointed last month, Ng’andu has sought to mend fences with the miners, with relations deteriorating following tax changes and an ownership dispute over Konkola Copper Mines.
Zambia’s mining industry fiercely opposes the tax.
Zambia is Africa’s second-largest copper producer.
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.
Businesses in Ghana would now have to face a new legal structure. Ghana’s President Nana Addo Dankwa Akufo-Addo has just given his assent for Ghana ’s new Companies Act to replace the 1963 version. This was after the new Act was brought to him from Parliament on Friday, 2nd August after it was passed by Parliament in May this year.
Here Is All You Need To Know About The New Law
The law, which has 428 pages and 369 clauses, has created a new office to perform functions relating to incorporated partnerships and registered business names.
This new office will be responsible for the appointment of inspectors and will assume the functions of the Official Liquidator under the Bodies Corporate (Official Liquidations) Act 1963.
The office will have financial autonomy and be funded from income sources such as sums of money approved by parliament, fees and charges, proceeds from the sale of the Companies Bulletin, donations, grants, and investment income.
The law also gives room for dissenting minority shareholders to have rights to compel their companies to buy out their shares. Such shareholders will now be entitled to request the company to purchase their share at a fair value.
Under the New Law, The New Age To Legally Own A Business Has Changed
The new law states that an individual can register or start a business at the age of 18, revised downwards from 21 years. One person is enough to form an incorporated company in Ghana as the one or more persons may form an incorporated company by complying with this Act.
No More Ultra Vires Objects
With this new law, the application of ultra vires doctrine to companies in Ghana has been completely abolished. From the provisions of the Companies Act, companies will have the option to state the nature of their businesses or their objects.
The implication is that companies that will state their objects will be restricted to operate within the scope of their objects but those who opt not to state their object will have no restrictions and can do any legitimate business.
Improve Ease of Doing Business?
Ghana ‘s President Akufo-Addo was confident that this new Companies Act will improve significantly the ease of doing business in Ghana, enhance the corporate regulatory and governance framework, and reduce the cost of ensuring compliance for businesses.
“I invite the business community in Ghana, and those from outside our shores, to take advantage of the growing business-friendly environment being created in Ghana, and invest in our country. Let me reiterate that Ghana continues to be a haven of peace, security and stability, indeed, the safest country in West Africa, and legitimate investments are protected,” the President noted.
Ease of Doing Business in Ghana
President Akufo-Addo added that more needs to be done to complete the country’s business reform agenda, and the Corporate Restructuring and Insolvency Bill, which is currently before Parliament, will, amongst others, provide the avenue to help resuscitate distressed, but viable business entities and establishments from liquidation and their ramifications.
To download Ghana’s new Companies’ Act, click here
With the coming into effect of the African Continental Free Trade Area (AfCFTA), and with Ghana playing host to the secretariat, the President indicated that the country is going to be the hub for African trade and investment, bringing in its wake more jobs, expanded conferencing and hospitality services, enhanced aviation and other transportation services, and related allied businesses.
“Consequently, the timing of our business law reforms could not have been more propitious,” he added.
President Akufo-Addo also launched the GARIA Trust Fund, which is designed to be the principal financing vehicle for GARIA and will be managed by an independent Board of Trustees.
“I am going to ask the Ministries of Finance, Trade and Industry, and Business Development to see to what extent they can properly assist the Fund. In the meanwhile, I am personally donating GH¢50,000 as my modest contribution to the Fund,” he added.
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.
Every day, Egypt’s entrepreneurs wake up to pursue their next rounds of investments, expanding across borders, entering into strategic partnerships, without looking back. From Swvl to Colnn to Fawri, the Egyptian startup ecosystem is always in the news. But behind all these struggles and hustles, there are stories, the reasons that have made the country’s startup ecosystem one of the most successful in Africa.
In fact, Egypt has over the past few years scaled up its entrepreneurial activity, becoming the fastest-growing startup ecosystem in the Middle East and North Africa (Mena) region according to a report by Magnitt. Below are some of the reasons why Egypt’s startup owners’ struggles are continually on the rise.
Inspired by the falling inflation rate and an economy that is on its way to recovery, more people are gaining the confidence to launch their own business.
“We have seen a lot of change in the startup ecosystem in Egypt in the last couple of years. We see it in the number of our applications; it is doubling. Also, in the quality of the entrepreneurs who are applying to join the programme,” says Marie Therese, managing partner at accelerator Flat6Labs Egypt.
With a population of more than 100 million, Egypt’s market has the potential to be one of the most lucrative and it is attracting the attention of not just startups from the wider region, but also investors.
“Over the past three years we have been seeing more access to finance and more interest from global investors to invest in the ecosystem, adding to that the governmental initiatives supporting starts and SMEs,” says Mohamed Hamza, associate director at AUC Venture Lab. “We have been seeing an increased awareness about entrepreneurship through the work of various stakeholders, appearing on TV and having dedicated programmes directing attention towards the topic as well as the introduction of entrepreneurship education as a requirement in a number of public universities.”
Presence of Venture Capital Firms, Accelerators and Incubators in Egypt
There is also the presence of an appreciable number of venture capital (VC) firms, accelerators, and incubators in Egypt. These startup funders have been on the increase, and they are continually showing interest in entrepreneurship in Egypt.
As a matter of fact, a report by the Global Entrepreneurship Monitor (GEM), launched by The American University in Cairo School of Business in 2018, noted that 82 percent of Egyptians perceive successful entrepreneurs as having high social status and almost 76 percent of Egyptians, mostly youth, perceive entrepreneurship as a good career choice, compared to a global average of 61.6 percent. This is even brightened by 55.5 percent other Egyptian non-entrepreneurs surveyed who expressed their interest in starting their own business, a percentage that is double the global average.
“There is a shift in the mindset. Young people are more eager now to start their own projects. Also, there are so many entities that provide help and support to startups. The more young people know about these entities and the fact that there is so much support, the more they are encouraged to start their own projects,” says Therese.
Lack of Interesting Jobs For Young People
Again, Egypt’s younger population may be showing increasing interest in entrepreneurship because young people are just getting fed with uninteresting jobs.
One of the biggest drivers for the rise in entrepreneurship in Egypt is the lack of “interesting jobs for young people”, notes Therese.
This is seen in the statistics. Egypt’s overall unemployment rate currently stands at around 8 percent according to CAMPAS, Egypt’s statistics agency, however, its youth unemployment rate as of 2018 was more than 32 percent according to the World Bank.
According to the GEM report cited above, opportunity-driven entrepreneurship has been decreasing at the expense of necessity- driven entrepreneurship that is driven by the lack of other work alternatives, increasing from 31.1 percent in 2016 to 42.7 percent in 2017, compared to a global average of 22.2 percent.
You would have no choice here but to cite Swvl as an example of an Egyptian startup trying to confront a global problem from a local perspective. Take for instance the historic city of Cairo, Egypt’s capital, a city noted with a dense population of 30 million, its crumbling infrastructure and other social and infrastructural problems it is facing. Startups within the city have taken note of these problems and have hopped in and have accepted Cairo as fertile ground for solving problems that many cities in emerging markets around the world are experiencing.
Take a look at Egypt’s transport sector. Cairo has excelled here by solving the transportation problem for overcrowded cities with poor public transportation systems. The city has seen startups that have provided the solutions. Swvl is one such example. Swvl is an application for booking buses. The startup recently closed a $42 million investment round, marking the biggest VC investment deal in the country and the highest in Mena in the second quarter of this year.
“Startups can offer many innovative solutions for the big issues. We cannot say they are solving the whole thing at one time, but at least they are offering a know-how and a new way of dealing with things just like what happened with the transportation market starting with Uber then the rise of Careem then Swvl which is much more Egyptian and much more related to our situation and streets,” says Ahmed Adel, business mentor at Fekretak Sherketak.
Swvl understood the Egyptian market and this enabled it to become Egypt’s transport market leader. By setting the pace, the startup highlighted the opportunities in Egypt’s buses sector with both Uber and Careem launching their own service.
“We can even see that the public transportation sector started to use mobile applications such as Mwasalat Misr which I think will be a good experiment that will be generalised soon,” says Adel.
However, notwithstanding the innovation and enthusiasm in Egypt’s startup ecosystem, there remains plenty of challenges that hinder the growth of startups in the country, many of which end up failing. Egypt has the highest rate of business discontinuation among the 49 countries studied in the GEM report with a rate of 10.2 percent in 2017, a significant increase from 2.7 percent in 2010.
The report states that this high discontinuation rate is as a result of the challenging business environment reflected mainly in the lack of profitability for businesses and the difficulties in accessing capital.
“Investors need to understand that the nature of investing in startups is different,” says Mohamed Khedr, managing partner at Endure Capital and founder of Fatakat, an online network aimed at Arab women. “Investors are used to dividends and thus find it difficult to supply startups with money for seven or 10 years and wait for its exit until they can have their money.”
Khedr says many investors “do not understand that they can have a maximum of 30 percent stake because the founders still have upcoming investment rounds and stake to share and do not want to end up with 3 or 4 percent share”.
Other investors in Egypt’s startup ecosystem also tend to be overbearing and, most times seem to get too involved in the day to day running of the startups. This perhaps leads to the ultimate disintegration of the startups before they even begin to gain traction.
The Regulatory Environment Is Also A Hindrance
Egypt’s regulatory environment is also bad for most startups. This is worse when it comes to investing in startups.
“There needs to be new laws that are introduced specifically for startups such as shareholders’ agreement as well as regulations that ease taxation and financial restrictions and facilitate procedures of registering startups,” says Khedr.
Lack of Experience
Egypt’s startup owners may not be getting their acts together after all, and this may be a crucial reason why most startups in the country fail. However, this is not an Egypt factor alone. Generally, Egyptian entrepreneurs have a low fear of failure compared to the global average in GEM.
Nevertheless, despite these positive attitudes, most entrepreneurs in Egypt insist that running personal businesses or startups are still a tough and stressful job, especially with extended working hours, high risk and high level of uncertainty. About nine out of 10 startups in MENA fail. Few are however aware of the failure rate. This is because much of the media focus on the success stories, investment rounds, and acquisitions.
“One of the biggest reasons why startups fail is experience. You can learn how to be an entrepreneur but not open your own business,” says Adel who founded a startup when he was still a university student and had to shut it down a year later. “You can be an intraprenuer. You can join a startup to learn more. I am not encouraging students to open their startups without experience. If you have a good idea that you think will change the market, just get some experience in your team.”
Lessons In Failure
Yet, there are lessons to be learned in failure. Many entrepreneurs in Egypt who have failed to learn from their mistakes. Most of them strive to start new businesses. Wasla Browser is a notable example. The Wasla Browser is the third venture for Wasla Browser’s team members after their initial startups failed. While university graduates continue to found their own businesses in the hope of becoming their own boss and creating employment opportunities for themselves, it is the ones who are on their second or third ventures that are likely to see success and it is these founders who are contributing to the most value to Egypt’s startup ecosystem.
“The youngest people think that they will be their own decision makers, and no one will tell them what to do and so on which is actually not true. An entrepreneur is bossed by the market itself, the customers and investors,” says Adel.
Contributions from Yasmeen Nabil, a researcher with Wamda, a platform of integrated programs that aims to accelerate entrepreneurship ecosystems throughout the MENA region.
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.
Less than a year after its first round of venture funding, the Canadian Clearbanc, a startup which provides funding for other startups to spend on marketing and customer acquisition, has secured $300 million Series B financing round on Wednesday. This is record-breaking for a startup that just raised $70 million in December 2018.
The round was led by Highland Capital and existing investors Inovia and Emergence Capital.
Canada-based Clearbanc, which was pitched as an alternative to traditional venture capital funding, last raised $70 million in December.
See the pitch deck the Clearbanc team used to get traditional venture investors on board with its unconventional sales pitch.
Clearbanc is betting that venture capital is the next in line for disruption, and they just raised $300 million in venture funding to prove it.
The Canadian startup, which provides funding for other startups to spend on marketing and customer acquisition, announced Wednesday a $300 million Series B financing round led by Highland Capital, Inovia, and Emergence Capital. The financing portion of the round was led by Arcadia Funds with participation from Upper90 Ventures.
Clearbanc pitches itself as an alternative to venture capital for startups spending heavily on things like Facebook and Google ads, and this is its second venture funding round in less than a year. According to Pitchbook data, the company closed a $70 million Series A in December.
Clearbanc claims to automate the pitching process using a machine learning model that can supply companies with anywhere from $10,000 to $10 million in funding instead of giving up a portion of the company to an investor just to turn around and spend the funds on ads. This model works particularly well for e-commerce startups that need to get in front of new customers to grow, according to Gary Vaynerchuk, CEO of VaynerMedia and Clearbanc investor.
So how was the Clearbanc team able to sell traditional venture investors on a model that is in direct competition with their own? Here’s the pitch deck that convinced investors that disruption could be worth $300 million.
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.
Following an open tender and a highly competitive international bidding process, the African Development Bank through its African Legal Support Facility (“ALSF”) and the National Petroleum and Gas Commission, representing the government of the Republic of South Sudan, selected the Centurion Law Group to build capacity in the Republic of South Sudan’s oil and gas sector.
The project is a result of the ALSF’s commitment to foster legal and technical best practices and transparency across South Sudan’s oil & gas value chain. It will focus on providing specialized capacity building training to officials from the National Petroleum and Gas Commission, including the development of best practice procedures for the negotiation, evaluation, and monitoring of contracts in the oil and gas sector.
As South Sudan continues to increase oil production – its most important export commodity – and attract foreign investment into its oil & gas sector, this project will enhance the National Petroleum and Gas Commission’s ability to fully exercise its functions as a regulator and a facilitator in the oil sector.
As per the South Sudan Petroleum Act of 2012, the National Petroleum and Gas Commission notably provides general policy direction with respect to petroleum resources, acts as a supervisory body in matters relating to petroleum resource management, approves all petroleum agreements on behalf of the Government and ensures that they are consistent with the Act.
“The National Petroleum and Gas Commission is a key institutional pillar of South Sudan’s oil & gas sector,” declared Hon. Caesar Oliha Marko, Chairperson of the Commission. “We are delighted to be working with a reputable firm like Centurion to enable our country’s oil industry to meet its obligation to our citizens and investors. Building capacity is key to us ensuring that we deliver on the promise of making oil work for everyone in South Sudan”.
The project will notably focus on reviewing South Sudan’s existing legal and fiscal framework and ensure the transfer of skills and know-how to the government’s representatives and experts.
“It is a real honor to have been selected for this project with the Petroleum Commission,” declared Nj Ayuk, CEO of the Centurion Law Group. “Local content development and domestic capacity building are at the core of everything we do as a firm. We take this project as a unique opportunity to contribute to the development of South Sudan and Africa’s oil industry in general. We are grateful to the African Development Bank and the Republic of South Sudan for entrusting us with this responsibility.”
“As a team, we truly believe in the role the National Petroleum and Gas Commission has in shaping the future of South Sudan’s oil & gas sector,” said Glenda Irvine-Smith Centurion’s Director of Business Development & International Relations, who will coordinate the project on behalf of Centurion.
“South Sudan in East Africa’s most mature petroleum province with the potential to double its current output of over 150,000 b/d in the next five years. Through CenturionPlus, our lawyers and experts on-demand platform, we will mobilize the best African and international experts for the benefit of South Sudan. We are honored to have been entrusted by the Commission and the African Development Bank to accompany South Sudan in this journey.”
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.
Andrew Rinaldi, the co-founder of the all-in-one, SaaS-delivered cybersecurity platform Defendify, knows all too well what it takes to obtain startup funding. Rinaldi and Defendify recently secured $1.6 million in pre-seed funding to help get their business up and running. Defendify secured the money from private investors with participation from the Maine Technology Institute and early-stage cybersecurity industry investor 3dot6 Ventures. In this interview with Chad Brooks, he shares his deep wealth of experience.
Q: How do you know when it is time to raise funds?
A: Really, it’s just math. Through business planning — which, yes, we all have to do — you figure out what you’ll need to get started and grow. And with that comes identifying the funding required to make that a reality.
If you don’t have the requisite funding readily available, it’s time to look to other people. As things progress, your position will absolutely change over and over, but creating some early projections and forecasting — even if rough — paints the picture.
Q: How do you know you are ready for an investor, versus just asking family and friends for money?
A: You’ll need to extend the conversation to new resources just as soon as you’ve exhausted friends’ and family dollars, or if they’re simply aren’t any friends and family options for you.
The other primary driver for going beyond friends and family is for access to new opportunities and resources. Some call it “smart money,” where whoever is helping fund your cause also brings their expertise, networks and often vast resources to the table. That, together with the short- and long-term financial impact, can be a major catalyst for your business and is the perfect time to think beyond friends and family. [Are you actively seeking financing options for your business? Check out our reviews and best picks of business loans.]
How to find the right investor for your startup
Q: How do you find potential investors?
A: It’s all about networking. Start with family and friends, then move to your professional network. Who do they know that might be interested? … Through the course of that outreach and sharing your story over and over, you are then introduced to more and more people beyond your network, who I call your extended network, and eventually, find prospective investors that might align. Yes, you can conduct cold outreach as well, and we all do, but it’s the power of your network — and extended network — that nets you the most effective relationships.Q: How do you find potential investors?
Q: How do you know if an investor is right for you and your business?
A: There has to be alignment, and I would suggest that starts with your core values. It’s not all that different than how you might seek employees or partners that believe in you and your vision. They can’t just have a basic business or financial goals — they have to have a mindset and operate in a way that works for you and with you.
I’ll also say it’s really important to pay attention to your gut. Sometimes you just know innately if an investor is a good fit or not, and that absolutely should be taken into consideration.
Q: What should your proposal to an investor include?
A: I would say to look at a proposal to an investor more like you would a marriage than a business. Yes, you have to go through the practical motions and economics that make for a good fit, but in the end, it’s mostly about having a healthy, mutually beneficial relationship that can stand the test of time. If you can’t overcome adversity and subjectivity and ride through the trials and tribulations together, you won’t be successful — no matter how good an idea or product you might have.
Q: Once you secure an investment, what role does the investor play in your business?
A: It all depends on who the investor is. Some will be totally hands-off and just check in casually, perhaps no more than chatting at the backyard barbecue or over a coffee or beer. That’s commonly where family and friends fall. Others will want to dig in more regularly or even participate as operators, not only to understand how the business is progressing but to see where they can help.
The good news is, everyone with a vested interest genuinely wants to help. Building a business from the ground up requires all the help you can get. It may come in many different forms — financial, networking opportunities, new customers and partnerships, constructive criticism, or candid advice. Whatever the case, it’s always worth listening (and remember, you don’t have to do everything everyone asks of you). These are people who want you to succeed, believe in you, and care about you. One thing is for sure — you’re in it together.
Q: What are the benefits of getting funds from an investor versus taking out a traditional business loan?
A: Traditional business loans aren’t usually an option for early-stage startups. While some lenders promote working with startups, it’s rare they actually do. I recommend exploring nontraditional loan opportunities.
For example, we have an amazing relationship with the Maine Technology Institute, which fuels innovation by providing technology development loans with preferable terms to early-stage companies. Their goal isn’t to run up the bill with interest or lock you in for the day you go public, [but] rather see you through to success and generate local jobs and economic impact. Those kinds of opportunities are well worth pursuing and often more fruitful.
The primary benefit of funds from investors is availability. Investors are willing to bet on you, especially early on, in ways the banks or lenders will not and may not for many years to come. And once convinced to invest, they can move quickly to infuse capital into the business, which can be a huge benefit.
That includes the potential for follow-on funding when you need additional dollars. Now, that doesn’t mean investor funds are simply readily available out there in the world. Actually, it’s just the opposite. Raising funds from investors is a full-time job on top of your full-time job of building and running the business.
Rapid-fire questions
Q: What piece of technology could you not live without?
A: The most important thing about running and scaling a healthy business is effective communication. Slack is a great tool for everything from regular check-ins to timely company updates and even sharing a funny story or joke. Slack doesn’t replace in-person communication or meetings — nothing can — but it can help promote ongoing chatter, transparency, and visibility while minimizing interruptions and interference.
Q: What is the best piece of career advice you have ever been given?
A: Many years ago, when I was building my first business, one of my longtime mentors introduced me to the notion that I should stop working “in the business” and start working “on the business.” I hadn’t ever thought of things that way, but once I did, it changed my whole perspective.
Now it seems so obvious; however, the truth is we all get caught up “in the business” to varying degrees. This advice not only resonated when I first heard it but is something I come back to each and every day.
Q: What’s the best book or blog you’ve read this year?
A: I really enjoyed One Bullet Away by Nathaniel Fick (who happens to also now be a leading cybersecurity executive). On one hand, [it’s] an intense and detailed journey taking you through the harsh realities of war and military life, [and] at the same time a tremendous and thoughtful story about leadership and accountability.
Q: What’s the biggest risk you’ve taken professionally? Did it pay off?
A: Moving to Portland, Maine. Building my past business in Boston for many years, my wife and I would occasionally escape the city for weekend trips north. I’ve had the good fortune of traveling extensively in my life and couldn’t believe all that Portland and Maine had to offer, and just a couple of hours away. So, when I looked beyond the amazing restaurants, fascinating culture, great schools and outdoor life, I was pleasantly surprised to discover a sprouting startup, tech and creative community.
It’s no secret Maine hasn’t historically been considered a center for business impact. So, betting on Portland was a huge risk. But it’s paid off big. You’d be absolutely amazed at the people and resources that are around. Turns out it’s not all lobsters and potatoes.
There are a ton of very smart and uber-successful people in Maine, including a rapid influx of talent migrating away from the ever-increasing cost of living in big cities like Boston and New York. If anyone out there is considering taking the same risk and seeing how Maine can pay off, I’m more than happy to share the secret.
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.
Time for early investors and startups in Kenya to leech onto the country’s blossoming petroleum industry! It is now safe to say that Kenya is now an oil-producing nation in the world, the only nation in the whole of East Africa, after South Sudan to actually export oil.
The country has just sealed its first oil export deal worth Sh1.2 Billion ($11.6m). With 60,000 to 100,000 barrels per day, Kenya is set to displace either Ghana, Brunei or Chad in the ranking of oil-producing and exporting countries by production capacity.
“We are now an oil exporter. Our first deal was concluded this afternoon with 200,000 barrels at a price of 12 million US dollars. So, I think we have started the journey and it is up to us to ensure that those resources are put to the best use to make our country both prosperous and to ensure we eliminate poverty,” Kenyan President Uhuru Kenyatta said
Here Is The Deal
This deal which is the first-ever in the whole of Kenya’s history saw Kenya selling off 200,000 barrels of oil at a price of Sh1.2 billion ($12m).
Kenya discovered commercial oil reserves in its Lokichar basin in 2012 and Tullow Oil estimates the basin to contain an estimated 560 million barrels in so-called 2C proven and probable oil reserves.
Tullow has said this would translate to 60,000 to 100,000 barrels per day of gross production.
Tullow Oil is a multinational oil and gas exploration company founded in Tullow, Ireland with its headquarters in London, United Kingdom. It has interests in over 150 licenses across 25 countries with 67 producing fields and in 2012 produced on average 79,200 barrels of oil equivalent per day.
Source: Statista 2019; Oil Production in Africa from 2001 to 2018 (in 1,000 barrels per day)
The government and Tullow Oil had expected to start exporting crude under the Early Oil Pilot Scheme (EOPS) by June this year but that appeared unlikely with the company only having trucked about half of the amount that will be needed for the first shipment.
In May, Kenya’s Ministry of Petroleum said about 88,000 barrels of oil had so far been trucked to Mombasa and was targeting to accumulate 200,000 barrels that would form the first export cargo.
The oil that has been ferried to Mombasa was produced in 2015 during an extended well testing exercise. By end of March, Tullow had shipped all the oil stored in Lokichar and has been setting up an Early Production Facility, which will produce 2,000 barrels a day.
Currently, major oil producers in Africa include Nigeria (0.0449), Libya (0.0101), Egypt (0.0418) and Algeria (0.0913), producing a total of 0.1881 trillion cubic feet of gas cumulatively which is 5.4 percent of the world’s total production.
In 2018, Africa’s total oil production amounted to around 8.19 million barrels of oil per day.
Africa’s production rate is, however, decreasing at a rate of 1.1 percent per annum. Africa’s consumption rate is at 138.2 billion cubic meters at a growth rate of 1.4 percent. It would take Africa 68 years to completely deplete its reserves.
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.
Zimbabwe is set to repeal the Indigenisation and Economic Empowerment Act as the country moves to enhance the attractiveness of the minerals sector to foreign direct investment (FDI). This is remarkable because it is the first time in 11 years since foreign investors stopped owning 100% stakes in companies they set up in Zimbabwe. For the economy, this is by far a direct way of telling investors to come to do business in Zimbabwe.
Here Is The Deal
Under the new arrangement, the Indigenisation and Economic Empowerment Act will be replaced by a more “business-friendly” Economic Empowerment Act, but in the interim, the Indigenisation Act has been amended to remove the critical diamond and platinum sub-sectors from the reserve list.
“Government, through the 2018 Finance Amendment Bill amended the Indigenisation and Empowerment Act and platinum and diamonds are now removed from the reserve list and shareholding will depend on negotiations with investors.
“Subsequently, the Indigenisation and Economic Empowerment Act will be repealed and replaced by the Economic Empowerment Act, which will be consistent with the current thrust “Zimbabwe is Open for Business,’’ Zimbabwe’s Finance and Economic Development Minister Mthuli Ncube, was quoted as saying while presenting the Mid-term Fiscal Policy Review statement and Supplementary Budget in Parliament yesterday.
The Indigenisation Act which is due for repeal requires foreign companies to give shareholdings of up to 51% in joint ventures to local partners.
The Implication Of The Intended Repeal
This repeal is expected to be revolutionary. First, it now means that local shareholding will depend on agreed terms by investors, while foreign shareholding can reach up to 100 percent.
Then again, it means that foreign investors can now work under an environment with less threat of breach of contract.
Such threats had a negative effect on the global investor community on Zimbabwe as a breach of contracts is anathema to investors.
The mining sector remains a key driver of Zimbabwe’s economic development, typically contributing circa 10 percent to the country’s gross domestic product (GDP) and around 60 percent to exports.
And true to form, during the first half of the year, the sector contributed US$1.3 billion, about 68 percent of the total exports of US$1,9 billion during the period.
The scrapping of the Indigenisation and Economic Empowerment Act is one of the measures that is expected to provide impetus to the economic contribution of the sector.
Expect More Foreign Direct Investment In The Zimbabwe Mineral Sector
The Indigenisation Act has already been amended to remove the critical diamond and platinum sub-sectors from the reserve list. The rest of the minerals have also been removed from the list.
The Indigenisation and Economic Empowerment Act worked to discourage and alienate much-needed FDI and investment as the way it was implemented threatened business.
Around 2013, the indigenization programme shook a lawfully and morally binding agreement between Zimbabwe’s largest platinum producer, Zimbabwe Platinum Holdings (Zimplats) and Government.
Comprehensive Strategy Already In Place for All Foreign Companies
The Zimbabwean government has over the past several months secured a number of mining investment deals, with the latest being a joint venture agreement between State-owned diamond miner, the Zimbabwe Consolidated Diamond Company and Russian firm, Alrosa.
The new diamonds agreement will see about US$12 million being invested in the exploration of diamond deposits over the next three years.
Minister Ncube yesterday said that Government will put in place a “comprehensive strategy” to see the coming into fruition of these deals.
“These investments will, however, take some time (up to 10 years of production) to give visible net benefits in view of long gestation periods for mining projects.
“Government will, therefore, in the second half of the year unveil a comprehensive strategy and roadmap towards a US$12 billion mining industry by 2023,” he said.
“The attainment of this milestone is not an event, but a process, which is well underway with concrete start-ups and expansion of projects in a number of minerals, which include platinum, gold, ferrochrome, coal and hydrocarbons, lithium, diamonds, iron ore, among others.”
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.
According to the “West Africa Inequality Crisis” report, six of the 10 fastest-growing economies in Africa are in West Africa, with the Ivory Coast, Ghana, and Senegal among the world’s 10 fastest-growing economies. “In most countries, the benefits of this unprecedented economic growth have gone to a tiny few,” the report reads.
“Inequality has reached extreme levels in the region, and today the wealthiest 1% of West Africans own more than everyone else in the region combined.” The report reads the vast majority of West Africans are “denied the most essential elements of a dignified life, such as quality education, healthcare, and decent jobs”.
In Nigeria, for example, the wealth of the five richest Nigerian men combined stands at $29.9bn — more than the country’s entire budget in 2017, the report reads.
Rather than tackle inequality, some of the region’s governments are underfunding public services, such as health and education, and failing to tackle corruption, Oxfam’s regional director Adama Coulibaly said.
The report called on governments to do more to promote progressive taxation, boost social spending, strengthen labour market protection, invest in agriculture and strengthen land rights for smallholders. For example, it said the region loses an estimated $9.6bn annually because of corporate tax incentives offered by governments to attract investors.
But not all governments are tackling inequality the same way. Cape Verde, Mauritania, and Senegal are among the most committed to reducing inequalities, it said, while Nigeria, Niger, and Sierra Leone are among the least.
Ivory Coast farmers expect bigger cocoa crop as rains beat average
Above-average rainfall last week in most of Ivory Coast’s cocoa-growing regions will boost the October-to-March main crop, but more sun is still needed, so says Ivorian Cocoa farmers. The mid-crop, which lasts from April to September in the world’s top cocoa producer, is coming to an end as few beans were leaving farms and producers focus on the main crop.
Farmers said they were happy with the rains, which would bring many pods to be harvested from mid-September to November. But more sun would be needed over the coming weeks to avoid diseases in plantations and help pods grow bigger, they said.
In the center-western region of Daloa, which produces a quarter of Ivory Coast’s cocoa, growers said they were confident the start of the coming main crop harvest would be abundant and of good quality. “Everything is going well on the cocoa trees.
A lot of pods have grown well and within a month and a half we will start harvesting,” said Marcel Kamenan, who farms near Daloa. “We still need good rains and sunshine (in August),” Kamenan said. Data showed rainfall in Daloa, including the region of Bouafle, was 58.2mm last week, which is 35.3mm above average.
In the western region of Soubre, at the heart of the cocoa belt, farmers said they were expecting as healthy a crop as last season’s if the weather remained adequate in August. “We have a lot of big pods on trees, and flowers and cherelles are still proliferating. It’s a good sign,” said Kouassi Kouame, who farms near Soubre. “Sunshine is average,” however, he said.
Data examined by Reuters’ show rainfall in Soubre, which includes the regions of Sassandra and San Pedro, was 33mm last week, 14.5mm above the five-year average. Farmers were optimistic about the main crop in the southern region of Divo, which had 43mm of rain last week, 28.6mm above average.
In the central region of Bongouanou, the rain was at 28.7mm (13.2mm above average) while the central region of Yamoussoukro saw 38.6mm of rain, 22.7 mm above average. In the western region of Man, farmers were concerned heavy rains would bring diseases, after rainfall reached 75.9mm last week, 45.8mm above the five-year average.
“If it keeps raining like this over the coming weeks, we fear insects and diseases will spread on the plantations,” said Moussa Kone, who farms near Man. Rains were below average in the southern region of Agboville and in the eastern region of Abengourou but farmers there reported no damage. Average temperatures ranged between 23.9°C and 26.2°C.
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.
Nigeria’s Access Bank, which has recently gone into a merger with Diamond Bank has recently announced plans to launch an innovative portal that will allow customers to process their loan application online. The bank granted up to N37 billion loans to its SMEs customers in 2018 alone.
The Bank has also organized a sensitization programme for players in the creative industry with a view to making access to the CBN Creative Sector Intervention Fund, CIFI, more seamless.
The Central Bank of Nigeria, CBN, recently rolled out the CIFI as part of its efforts to open up the creative sector and improve its contribution to the economy.
The CBN has already earmarked N20 billion for disbursement in the first phase of the exercise with three to 10 years payback plan and a maximum of nine percent interest rate per annum.
Fidelity Bank
Fidelity Bank has recently announced a partnership with PwC Nigeria, a tax and advisory services company, to fund SMEs with N12 million grant in its Fidelity Small and Medium Enterprises (SMEs) Funding Connect Series.
The bank also said that, at the final series of the event, three finalists will be rewarded a grand sum of N2 million (1st position) and N1 million each for the 2nd and 3rd positions respectively. The Executive Director Shared Services and Products, Mrs. Chijioke Ugochukwu, disclosed this at the Fidelity SME Forum on Inspiration FM, Lagos.
The event which will kick off in Lagos on August 7, 2019, is focused on funding.
“The event is focused on funding because in the course of our work, we have realised that aside capacity issues, funding is a major issue. So we try to create a platform where the supply and demand sides of the equation would meet. Supply meaning the fund providers while the demand side means the founders/entrepreneurs,’’ she said.
The entire series will be in Lagos, Port-Harcourt, later this year and in Kano early next year and we anticipate that across the three series we will have at least 3,000 participants, 10,000 SMEs, that will come in contact with 60 founders, 60 entrepreneurs and in total we are looking at N12 million in grants and across the entire series of the six breakout session in networking cocktails.
The three capacity building sessions will be with fund providers, founders, on one hand, model entrepreneurs, founders and subject matter experts.
“The five finalists get a chance to pitch the entire forum on August 7. So the five finalists will be live at the event and they will speak to the house about their ideas and three winners will emerge. The first prize will be N2 million and two consolation prizes of N1 million each.”
“To attend the event, you are to register by visiting the dedicated website for the bank which is smeconnect.fidelitybank.ng and of course also via the event app which you can download from Google Play stores for android phone users and the RS app store for Apple users.”
Nigerian banks’ lending pattern pointing to financial exclusion of SMEs
First Bank Of Nigeria
If you own micro, small or medium agricultural enterprise, this loan facility is a special intervention fund provided by the CBN to support your business. You get this loan at a low-interest cost and enjoy long-tenured repayment structure; to assist your business in enhancing capacity for employment generation, growth, and economic development.
Trusted customers of FirstBank seeking to expand their agri-businesses using low priced credit facilities as made possible under the scheme can benefit from this loan.
Management experience of at least 3 years in the enterprise to be funded is required.
Benefits
Interest rate: 9% (all-in), no other fee can be charged.
The credit facility is available either as term loan or overdraft.
Required Documents
Formal application for a Credit Facility.
Certificate of Incorporation.
Memorandum and Article of Association (MEMART).
Board Resolution to Borrow.
Feasibility Study/Business Plan.
Who Can Apply
SMEs with at least 3yrs Mgt Experience (Max obligor limit of N50m).
GTB
Fashion Industry Credit
Tailored to your Fashion business, designed for growth. In line with the CBN creative industry loan, the bank has created a single-digit interest rate loan at 9% to provide entrepreneurs in the fashion industry with all the financing they need to grow their business.
The loan can be:
Up to N5 Million for your fashion business.
Single-digit (9% per annum) interest rate at 0.75% per month
No fees
Flexible repayment plan spread over 360 days
Customers can access up to 50% of the average annual turnover
Food Industry
The bank also grants loan to the food industry. Now you can get all the financing you need with the GTBank Food Industry Credit, which offers you a single-digit interest rate loan of just 9% per annum.
The loan can be:
Up to N2 Million
9% per annum interest rate (0.75% monthly)
Flexible repayment plan spread over 180 days
Zero Fees
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.
