Major International Business Headlines Brief::: 22 January 2021

Fri Jan 22 07:31:52 CAT 2021

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Major International Business Headlines Brief::: 22 January 2021

ü  Google threatens to withdraw search engine from Australia

ü  Nissan says Brexit deal 'positive' and commits to UK

ü  Premium Bonds operator NS&I 'must work hard to win back customers'

ü  Brexit: Retailers could burn goods stuck in EU

ü  Nord Stream 2: MEPs call for halt to Russian gas pipeline

ü  U.S. labor market recovery fading; housing, factories underpin economy

ü  Exclusive: Air taxi start-up Joby explores deal to go public - sources

ü  Intel avoids outsourcing embrace, investigates hack of results

ü  Kenya Joins Tanzania and Uganda in Taxing Digital Transactions

ü  Nigeria: Nation's Decade-Long Wheat Production So Woeful, Consumption Leads By 98%

ü  Nigeria: We Should Stop Foreign Businesses Exploiting Our Markets - Buhari

ü  Africa: AfDB, EIB Seal Deal to Enhance Africa's Development

ü  Kenya, Britain Ink Sh8billion Affordable Houses Deal

ü  Ghana: British Airways Plans to Move Accra Flights to Gatwick Denied

ü  Mozambique: Maputo Port Reports 13 Per Cent Decline in Cargo

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Google threatens to withdraw search engine from Australia

image captionGoogle says the new law will lead to it disabling its search tool for Australians

Google has threatened to remove its search engine from Australia over the nation's attempt to make the tech giant share royalties with news publishers.

Australia is introducing a landmark law to make Google, Facebook and potentially other tech companies pay media outlets for their news content.

But the US tech giants have fought back, arguing the laws are onerous and would damage local access to services.

Australian PM Scott Morrison said lawmakers would not yield to "threats".

The proposed news code would tie Google and Facebook to mediated negotiations with publishers over the value of news content, if no agreement could be reached first.

Google Australia managing director Mel Silva told a Senate hearing on Friday that the laws were "unworkable".

"If this version of the code were to become law, it would give us no real choice but to stop making Google Search available in Australia," she said.

Australia rebukes Google for blocking local search results

Google accused of misinformation in Australia row

Mr Morrison said his government remained committed to progressing the laws through parliament this year. At present they have broad political support.

"Let me be clear: Australia makes our rules for things you can do in Australia. That's done in our parliament," he told reporters on Friday.

"And people who want to work with that, you're very welcome. But we don't respond to threats."

Other lawmakers on Friday described Google's ultimatum as "blackmail" and "big corporations bullying democracy".

Why is Australia pushing this law?

Google Search is the dominant search engine in Australia and has been described by the government as a near-essential utility with little market competition.

The government has argued that because the tech platforms gain customers from people who want to read the news, the tech giants should pay newsrooms a "fair" amount for their journalism.

In addition, it has argued that the financial support is needed for the embattled news industry because a strong media is vital to democracy.

Australian print media has seen a 75% decline in advertising revenue since 2005, according to the government. Many Australian news outlets have shut down or cut jobs in recent times.

Google's threat to remove its primary product is its most severe yet, amid a debate that is being closely watched by other nations.

Earlier this week, US trade representatives urged Australia to drop the laws which they said attempted regulation "to the clear detriment of two US firms".

What does Google argue?

Ms Silva said the laws would set "an untenable precedent for our businesses and the digital economy" if the company had to pay for link and search results.

This was not compatible with the free-flowing share of information online or "how the internet works", she argued.

"We do not see a way, with the financial and operational risks, that we could continue to offer a service in Australia," she said.

Last week, Google confirmed it was blocking Australian news sites from its search results for about 1% of local users. It said it was an experiment to test the value of Australian news services.

Facebook last year also threatened to stop Australian users from sharing news stories on the platform if the law went ahead.

The social media giant repeated that position on Friday, with executive Simon Milner telling the Senate hearing it was "a potential worse-case consequence".

He said Facebook derived almost no commercial benefit from having news content on its platform.

Both Google and Facebook have also argued that news organisations already get the benefit of the platforms driving readers towards their websites.

This is a highly unusual threat.

Google dominates the search engine market with a nearly 90% market share. Almost all its revenue is from ads.

For Google to threaten to pull out of an entire country suggests the company is worried.

Australia is nowhere near its biggest market. But Google execs are fearful about the precedent these new laws could have.

Google has had a very profitable pandemic so far, whilst many local newspapers have struggled. That doesn't look good, and Australian politicians aren't the first, and won't be the last, to point that out.

Google says it wants to help fund original, local journalism.

But clearly it believes that what is being proposed in Australia could fundamentally hurt its business model if replicated elsewhere.—bbc

Nissan says Brexit deal 'positive' and commits to UK

Japanese car maker Nissan has told the BBC its Sunderland plant is secure for the long term as a result of the trade deal reached between the UK and the EU.

It said it will move additional battery production close to the plant where it has 6,000 direct employees and supports nearly 70,000 jobs in the supply chain.

Currently, the batteries in its Leaf electric cars are imported from Japan.

Nissan would not confirm if this would mean additional jobs at Sunderland, which is the UK's largest car plant.

Manufacturing the more powerful batteries in the UK will ensure its cars comply with trade rules agreed with the EU requiring at least 55% of the car's value to be derived from either the UK or the EU to qualify for zero tariffs when exported to the EU.

Some 70% of the cars made in Sunderland are exported and the vast majority of them are sold in the EU.

Nissan had issued stark warnings last year that if the UK left the EU without a trade deal, the resulting tariffs on cars and components would make the Sunderland plant "unsustainable".

Nissan's chief operating officer Ashwani Gupta told the BBC: "The Brexit deal is positive for Nissan. Being the largest automaker in the UK we are taking this opportunity to redefine auto-making in the UK.

"It has created a competitive environment for Sunderland, not just inside the UK but outside as well.

"We've decided to localise the manufacture of the 62KW battery in Sunderland so that all our products qualify [for tariff-free export to the EU]. We are committed to Sunderland for the long term under the business conditions that have been agreed."

It came as Nissan paused one of its two production lines in Sunderland on Friday as disruption at ports caused by the pandemic affected its supply chain.

The company said the move would affect the line which produces the Qashqai and Leaf, but work would resume next week.

'Belief in Britain'

Business Secretary Kwasi Kwarteng welcomed the firm's endorsement of Sunderland as a manufacturing base.

"Nissan's decision represents a genuine belief in Britain and a huge vote of confidence in our economy thanks to the certainty our trade deal with the EU delivers," he said.

"For the dedicated and highly-skilled workforce in Sunderland, it means the city will be home to Nissan's latest models for years to come and positions the company to capitalise on the wealth of benefits that will flow from electric vehicle production."

It's particularly welcome after the more guarded comments from the boss of Vauxhall's parent company last week.

Speaking as the tie-up between Fiat Chrsyler and Peugeot Citroen was christened with new umbrella name Stellantis, boss Carlos Tavares said that the future of its Ellesmere Port plant depended on the support the UK government was prepared to offer after its decision to ban sales of new petrol and diesel cars after 2030.

"If you change, brutally, the rules and if you restrict the rules for business then there is at one point in time a problem," he said.

Looking forward, he said it would make more sense to locate an electric vehicle factory closer to the larger EU market.

Industry voices welcomed the news from Nissan but reinforced the message from Vauxhall's owners that the government needs to do more to secure the future of the car industry as it electrifies.

"This is obviously good news and will help the Nissan Leaf avoid any future tariffs, but we are going to need to see a lot more investment in battery production in the UK if we are to preserve the UK as a car manufacturer and exporter," said Professor David Bailey of Warwick University.

The head of trade body the Society for Motor Manufacturers and Traders agreed.

"The battery plant in Sunderland may be enough for Nissan's near-term plans to build tens of thousands of electric cars but the UK made 1.5 million cars last year and all will be partly electric by 2030," Mike Hawes said.

'Jobs at risk'

Andy Palmer, former boss of Aston Martin and current chairman of electric bus maker Switch Mobility, has gone further. He says that 800,000 jobs are at risk if the UK government doesn't act now to foster battery investment.

"Without electric vehicle batteries made in the UK, the country's auto industry risks becoming an antiquated relic and overtaken by China, Japan, America and Europe."

He urged the UK government to use every lever at its disposal to make the UK attractive.

UK car investment has fallen sharply since the UK voted to leave the EU.

In the five years to 2016 it averaged £3.5bn per year. In the four years since it has averaged around £1bn - a fall of 71% at a time when the technology and map of car production are going through their biggest revolution since the car was invented.

The Nissan decision is therefore a very welcome boost to the UK which is in an international scramble for the investment of the future which is happening right now.—BBC

Premium Bonds operator NS&I 'must work hard to win back customers'

Premium Bonds operator NS&I will need to "work hard to win back customers" after shoddy service in recent months, MPs have said.

The savings account operator was accused of causing anxiety to customers who waited an average of 20 minutes for calls to be answered in October.

Its boss has apologised for the poor service, in a letter to the influential Treasury Committee.

But the committee's chairman said NS&I's reputation had been damaged.

Prize changes

Accounts with NS&I, which stands for National Savings and Investments, are guaranteed by the Treasury, and raise money for the government.

In response to the coronavirus crisis, it was set targets to raise more. Its comparatively high rates brought an influx of deposits. Nearly £24bn was raised from July to September.

When these rates were subsequently cut, there was an exodus of savers, resulting in a net loss of £9.5bn in funds in the final three months of the year.

At the same time, NS&I announced plans to phase out paper warrants - like a cheque - which are sent in the post to some Premium Bonds winners.

It proposed that prizes should be paid directly into bank accounts instead.

Calls from people wanting to withdraw money, and complaints from those worried about Premium Bonds prize changes flooded in - but call centres were facing their own Covid-related staffing pressures.

The result was long waits for customers on the phone and slow responses to correspondence that led to a "great deal of anxiety" for customers, according to the Treasury Committee.

Call waiting times averaged 17 minutes in September, 20 minutes in October and 19 minutes in November.

In a letter to the Treasury Committee, NS&I chief executive Ian Ackerley said: "I am very sorry for those customers who experienced poor service last year and I am determined to return NS&I to delivering the high quality service our customers have been accustomed to for many years now."

He added that service levels had improved, more staff had been hired and four additional contact centres had been opened.

Regarding the change to Premium Bonds, he wrote: "I regret that we undertook this change at a time when our operations were under stress."

However, he defended the plans - which have been delayed until the spring - saying that they were more efficient and meant fewer prizes would go unclaimed.

Mel Stride, who chairs the Treasury Committee, said: "I would like to thank Mr Ackerley for his frank response, but the damage that may have been done to NS&I's reputation over the last few months is worrying.

"NS&I has a big role to play in helping the government fund the costs of the coronavirus recovery scheme and it will need to work hard to win back customers."--BBC

Brexit: Retailers could burn goods stuck in EU

UK retailers could abandon goods EU customers want to return, with some even thinking of burning them because it is cheaper than bringing them home.

They say the new EU trade deal has put costly duties on returns at a time when firms are already struggling.

The BBC has been told UK High Street and luxury brands have a mounting volume of goods stuck with courier services on the continent.

None of the retailers would comment on the problem.

Adam Mansell, boss of the UK Fashion & Textile Association (UKFT), said it's "cheaper for retailers to write off the cost of the goods than dealing with it all, either abandoning or potentially burning them."

Since 1 January, lots of European customers have been presented with an unexpected customs invoice when signing for goods they've ordered from the UK. These new customs charges are a result of the new EU trade deal with the UK.

Added costs

"It's part of the ongoing small print of the deal," said Mr Mansell. "If you're in Germany and buying goods from the UK, you as the German customer are the importer bringing goods into the EU.

"You then have a courier company knocking on the door giving you a customs clearance invoice that you need to pay to receive your goods."

Many customers automatically reject the goods, refusing to pay the additional surcharges, leaving couriers to take them away.

About 30% of items bought online are returned, according to figures from Statista. That has meant large volumes of goods are heading back to the UK.

When goods arrive back at depots on the Continent, there is new customs paperwork to complete. "Export clearance charge, import charge arrival, import VAT charge and depending on the goods a rules of origin document as well," said Mr Mansell.

"Lots of large businesses don't have a handle on it, never mind smaller ones."

The BBC has seen a document that states four major UK High Street fashion retailers are stockpiling returns in Belgium, Ireland and Germany. One brand will incur charges of almost £20,000 to get the returns back.

Couriers and freight businesses that ship from the UK to Europe are also experiencing delays getting goods to the Continent because of the new customs clearances.

"It's a bigger change than we thought possible," explained Shona Brown from Speedy Freight, a courier service. "Before, we'd get the order to Germany and off the driver would go.

"Now we've got to do export entry detailing where was it made, the driver needs to go to the customs office at Dover, then customs in Germany on arrival and then sort out the VAT. There are so many hoops to jump through, it's so laborious."

"You've got to have manpower to figure out what to do. And with people working from home it's difficult. For small businesses, it is a huge thing for people to do," she added.

Ulla Vitting Richards runs her sustainable fashion brand VILDNIS from the UK. She has stopped exporting to her fastest growing market, the EU, because of the new customs processes.

"I've been involved in logistics before. I expected it to be bad and I am used to shipping to the USA which is difficult. But this is just mind-blowing," she said.

"Every day there is another layer. In the first two weeks we couldn't get answers. For two years we were told to get ready for Brexit. But for these we couldn't prepare."

She added: "I don't think we can increase prices but we might just have to say that we can't make the business with the EU work. It is a real shame. There is a huge interest in sustainable fashion in Europe and we might have to walk away from it."

Ulla did speak with the Department for International Trade for help and advice. She was told that setting up a subsidiary distribution hub in Europe might be a good idea: "He told me we'd be best off moving stock to a warehouse in Germany and get them to handle it."

Retailers in the UK and Europe that trade across the new customs border are all still adapting to the rules. Hauliers and customs agents are facing a steep learning curve too.

The government said: "Now the UK has left the EU customs union and Single Market, there are new rules and processes businesses will need to follow.

"We have encouraged companies new to dealing with customs declarations to appoint a specialist to deal with import and export declarations on their behalf - and we made more than £80m available to expand the capacity of the customs agents market."

It added: "Most businesses use a specialist such as a customs broker, freight forwarder or fast parcel operator to deal with this.

"The government will continue to work closely with businesses to ensure they are able to trade effectively under the new rules."--BBC

Nord Stream 2: MEPs call for halt to Russian gas pipeline

Germany has come under increased pressure to halt a Russian gas pipeline following the detention in Moscow of Kremlin critic Alexei Navalny.

The European Parliament has backed a call for Nord Stream 2 to be scrapped.

MEPs called on EU states to impose sanctions on any Russians involved in jailing Mr Navalny after he returned from Germany where he had been recovering from a nerve agent attack.

The US has imposed sanctions on a Russian ship laying the pipeline.

Washington argues the project will increase Russian influence over Europe.

The US Treasury's action against the ship Fortuna came in the final days of the Trump administration, but President Joe Biden is expected to pursue the same policy, according to his nominee for secretary of state, Antony Blinken. In 2016, Mr Biden said the pipeline was a "bad deal" for Europe.

Asked about the US move on Thursday, German Chancellor Angela Merkel said her "basic attitude" on the €10bn ($11bn) project to double Russian gas exports to Germany had not changed, but she wanted to discuss the issue with the Biden administration.

"We have to talk about which economic relations in the gas sector are acceptable with Russia and which aren't," she said, reminding reporters in Berlin that the US itself traded with Russia in oil.

Around 94% of the 2,460km (1,528-mile) pipeline has already been laid but work was halted for a year at the end of 2019 amid the threat of US sanctions.

Late last year the main pipe-laying company pulled out. But last month the Fortuna completed a 2.6km section in German waters and was due to start operations in Danish waters before work was suspended. The Fortuna was sailing in the Baltic on Thursday, according to most recent data.

Russia's Gazprom, which is behind the construction project, is still working with several Western companies, which have also been threatened with US sanctions. German energy firm Uniper said on Thursday it stood by the project and was convinced it would be completed.

Why is Navalny's case being invoked?

When Alexei Navalny, 44, was poisoned in Russia by a Novichok nerve agent last August he was flown to Germany and recovered in a Berlin hospital.

Germany was at the forefront of European demands for Russia to investigate the attack in Siberia, which has since been blamed by investigative journalists on a team of FSB security service agents. Russia denies any involvement.

German Foreign Minister Heiko Maas even indicated at the time that the future of the pipeline could be at stake. Mr Maas is hoping to travel to Washington to meet Antony Blinken as soon as he is sworn in as secretary of state.

In their non-binding vote, members of the European Parliament called for the EU to "immediately prevent" the completion of Nord Stream 2 and demanded Mr Navalny's immediate release from jail.

German Green MEP Reinhard Butikofer tweeted that it was "in Europe's interest that this pipeline is not built".

Mr Navalny is currently being held in Matrosskaya Tishina prison in Moscow. Russian authorities jailed him for failing to report regularly under the terms of a suspended sentence while he was recovering in Germany. He has also been accused of libelling a World War Two veteran.

His supporters are planning to take to the streets of dozens of Russian cities on Saturday in protest at his imprisonment. Police on Thursday detained Mr Navalny's spokeswoman, Kira Yarmysh. and fellow opposition activist Lyubov Sobol in response to the calls for protest.

A video produced by Mr Navalny's team and released on Tuesday during his detention has been viewed more than 47 million times. Its allegations that President Vladimir Putin spent illicit funds on an extravagant palace have been vehemently denied by the Kremlin.

EU foreign affairs ministers will discuss both Mr Navalny's detention and the pipeline on Monday. But EU foreign affairs chief Josep Borrell has said the 27-member state union cannot prevent Germany from going ahead with Nord Stream 2.

"EU-Russia relations cannot be reduced to the poisoning of Mr Navalny. We will respond swiftly and decisively to this poisoning, but we have other dimensions in our relations with Russia that we need to continue to address," he added.--BBC

U.S. labor market recovery fading; housing, factories underpin economy

WASHINGTON (Reuters) - The number of Americans filing new applications for unemployment benefits decreased modestly last week as the COVID-19 pandemic tears through the nation, raising the risk that the economy shed jobs for a second straight month in January.

Despite the labor market woes, the economy remains anchored by strong manufacturing and housing sectors. Other data on Thursday showed homebuilding and permits for future residential construction surged in December to levels last seen in 2006. Factory activity in the mid-Atlantic region accelerated this month, with manufacturers reporting a boom in new orders.

The services sector has borne the brunt of the coronavirus crisis, disproportionately impacting lower-wage earners, who tend to be women and minorities. Addressing the so-called K-shaped recovery, where better-paid workers are doing well while lower-paid workers are losing out, is one of the key challenges confronting President Joe Biden and his new administration.

White House economic advisor Brian Deese said the fragile labor market underscored the urgency for U.S. Congress to act quickly on Biden’s $1.9 trillion relief plan to “get this virus under control, stabilize the economy, and reduce the long-term scarring that will only worsen if bold action isn’t taken.”Initial claims for state unemployment benefits fell 26,000 to a seasonally adjusted 900,000 for the week ended Jan. 16, the Labor Department said. Economists polled by Reuters had forecast 910,000 applications in the latest week.

Including a government-funded program for the self-employed, gig workers and others who do not qualify for the regular state unemployment programs 1.4 million people filed claims last week.

Out-of-control coronavirus infections are disrupting operations at businesses like restaurants, gyms and other establishments where crowds tend to gather, reducing hours for many workers and pushing others out of employment.

Consumers are also hunkering down at home, hurting demand. COVID-19 has infected more than 24 million people, with the death toll exceeding 400,000 since the pandemic started in the United States.

U.S. stocks hovered near record highs. The dollar fell against a basket of currencies. U.S. Treasury prices were lower.

Some of the elevation in claims reflects people re-applying for benefits following the government’s recent renewal of a $300 unemployment supplement until March 14 as part of the nearly $900 billion in additional fiscal stimulus. Programs for the self-employed, gig workers as well as those who have exhausted their benefits were also extended.

Exclusive: Air taxi start-up Joby explores deal to go public - sources

(Reuters) - Electric passenger aircraft developer Joby Aero Inc is exploring a deal to go public through a merger with a blank-check acquisition firm at a valuation of around $5 billion, according to people familiar with the matter.

Joby has hired investment banks to solicit interest from so-called special purpose acquisition companies (SPACs) about a potential deal, the sources said.

The sources requested anonymity because the discussions are confidential and cautioned that no deal is certain. Joby declined to comment.

Joby is developing an all-electric, zero-emissions vertical aircraft which it is aiming to deploy as an air taxi service by 2023 at the earliest. The Santa Cruz, California-based company last month agreed to take over Uber Technologies Inc’s flying taxi unit Elevate. Uber took a stake in Joby as part of the deal.

Joby has raised more than $800 million in private funding since it was founded in 2009 and in 2020 was valued at $2.6 billion, according to PitchBook, which tracks private fundraisings. Joby’s backers include Toyota Motor Corp and Intel Corp.

A SPAC is a shell company that raises funds in an initial public offering (IPO) with the aim of acquiring a private company, which then becomes public as result of the merger. For the company being acquired, the merger is an alternative way to go public over a traditional IPO.

SPACs emerged last year as one of the most popular investment vehicles on Wall Street.

A deal for Joby would come on the heels of another SPAC deal in the sector. Air taxi company Blade Urban Air Mobility agreed to merge last month with Blade, Experience Investment Corp, driving up the latter’s shares by 50%.

Intel avoids outsourcing embrace, investigates hack of results

(Reuters) - The incoming chief executive of Intel Corp said on Thursday that most of the company’s 2023 products will be made in Intel factories but he sketched a dual-track future in which it will lean more heavily on outside factories.

The lack of a strong embrace of outsourcing from new CEO Pat Gelsinger drove shares down 4.7% after hours. Shares rose 6.5% during regular trade, when the results were released ahead of the close. The company said it was investigating “non-authorized” access to some of the results, with the Financial Times quoting its chief financial officer as saying the microchip maker had been hacked.

Intel also forecast first-quarter revenue and profit above Wall Street expectations, continuing to benefit from pandemic demand for laptops and PCs that have powered the shift to working and playing from home.

Gelsinger said he was “confident that the majority of our 2023 products will be manufactured internally” though he also said the use of outside chip factories is likely to increase “for certain technologies and products.”

Intel has been considering since last July whether to drop its decades-old strategy of both designing and making chips by turning for help on its central processing units, or CPUS, to “foundry” manufacturers. Those partners could be Taiwan Semiconductor Manufacturing Co and Samsung Electronics. Intel’s manufacturing technology, called a 7-nanometer process, is expected in 2023.

“We didn’t get our answer on which foundries and when,” said Patrick Moorhead of Moor Insights & Strategy. “They pushed the can down the road.”

Kinngai Chan, analyst at Summit Insights Group, said Intel is not likely to outsource its flagship chips.

“Intel’s 14-nanometer chip transistor speed has always been faster than what any foundry can offer even at 7-nanometer,” Chan said. “We believe it will increase its use of external foundries over-time - just not for its large-core CPUs.”

Keeping manufacturing in-house means higher investments. Bernstein analyst Stacy Rasgon questioned whether Gelsinger, currently the chief executive of VMware Inc who previously spent 30 years at Intel and announced his intention to return just last week, has had sufficient time to dig into the issue.

“It was pretty obvious they were trying to borrow his credibility” when Gelsinger endorsed Intel’s delayed 7-nanometer technology, Rasgon said.

Intel’s decision coincides with U.S. lawmakers having passed bipartisan legislation to fund U.S. chip manufacturing. But the new law has yet to specify funding levels or recipients, and Forrester Research analyst Glenn O’Donnell said Intel might take the opportunity to solicit U.S. government support for domestic manufacturing.

Boosted by a new high-end PC processor, Intel regained some momentum in the PC market, with volumes of PC chips rising 33%, faster than the 26% rise for the overall PC market, according to data from IDC.

Data center group sales, which powered Intel’s growth over the past several years, were $6.1 billion compared with analyst estimates of $5.48 billion, according to FactSet data.

But sales to cloud computing customers, some of the largest and fastest-growing purchasers of data center chips, were down 15% in the fourth quarter. Data center chip operating margins were 34% in the quarter, down from 48% a year earlier.

“We think (data center) operating margins are going to improve as we get toward the second half of the year, when we expect to see a rebound in cloud” chip sales, Intel Chief Financial Officer George Davis said.

The company also raised its dividend by 5%.

The chipmaker said it expects fiscal first-quarter adjusted sales of $17.5 billion and adjusted earnings per share of $1.10, both ahead of analyst consensus, according to IBES data from Refinitiv.

Fourth-quarter revenue of $20 billion and adjusted earnings per share of $1.52 also beat Wall Street targets.

Kenya Joins Tanzania and Uganda in Taxing Digital Transactions

Kenya has joined Tanzania and Uganda in taxing digital transactions to support its depleted public coffers in an economy weighed down by slowing private sector activities, shrinking revenue collections, growing public debt and increasing expenditure pressures.

The new tax has added more financial pain to households and businesses that started the year with tax relief measures rescinded by the National Treasury.

The Digital Service Tax (DST) which took effect on January 1, was introduced by the Cabinet Secretary for the National Treasury Ukur Yatani through the Finance Act 2020.

"With the fast advancement in technology, many business transactions are increasingly being carried out through digital platforms. In some cases, due to the nature of the transactions, it is difficult to effectively tax the income derived through such platforms," Mr Yatani said though the Budget statement for the 2020/2021 fiscal year.

"It is therefore necessary to provide a framework that will facilitate taxation of such income. In this regard, I propose to introduce digital service tax on the value of transactions at the rate of 1.5 percent."

The new tax has imposed a 1.5 percent tax on gross income derived from all services offered through the digital marketplace including downloadable digital content such as mobile apps, e-books and films, and over-the-top services that include streaming television shows, films, music, podcasts and any other digital content.

In Uganda, digital service tax was introduced in May 2018 by the Ugandan government to prevent gossip and broaden the country's tax base From July 2018, internet users in the country seeking to access social media sites were required to pay the daily duty tax of Ush200 ($0.05).

According to a report by the global human rights group Future Challenges e.V, more than 60 online platforms including Facebook, WhatsApp and Twitter were affected by the tax in Uganda and the country lost nearly 30 percent of internet users between March and September 2018.

Some Internet users resorted to using Wi-Fi in offices and restaurants to avoid the over-the-top (OTT) tax payment.

According to Future Challenges e.V, collection of the social media tax in Uganda hit a shortfall of Ush234 billion ($63 million) in the 2018/2019 fiscal year.

In Tanzania, to curb hate speech and fake news, the government introduced the Electronic and Postal Communications (Online Content) Regulations, 2018, for bloggers and online radio and television services requiring them to pay an annual fee of up to $900.

Under these rules, online content publishers (blogs, podcasts, videos) are required to apply for a license at a fee of Tsh100,000 ($43), pay an initial licence fee of Tsh1 million ($429) and an annual licence fee of Tsh1 million ($429)

Authorities can revoke permits of sites that publish content that is said to encourage or incite crimes.-East African.

Nigeria: Nation's Decade-Long Wheat Production So Woeful, Consumption Leads By 98%

Nigeria's trade report shows wheat was the country's second most imported item in the second and third quarters of 2020.

Nigeria's wheat production has been so dismal that for a decade the country only managed to produce just about two per cent of all the wheat it consumed.

Data from the United States Department of Agriculture shows that between 2010 and 2020, as the consumption level of wheat rose, the country failed to grow more wheat, instead it closed the shortfall in supply by significantly importing more wheat.

On average, the country produced just 2.06 per cent of the total amount of wheat consumed during that period.

The figures largely explain why the prices of wheat-related products, including bread and pastry, have consistently risen in the country.

The data show that while Nigeria produced 60 tonnes of wheat in each of 2018, 2019 and 2020, the domestic consumption of the commodity in those years stood at 4760, 4900 and 4319 tonnes respectively.

In the last decade, the country recorded its largest amount of locally-produced wheat in 2010 and 2012 with 100 tonnes in each of those years.

Still, those figures were very low compared to the country's annual demand and consumption of the commodity.

The consumption level, according to the USDA data, grew from 3582 tonnes in 2010 to 4900 tonnes in 2019. It fell slightly to 4760 tonnes in 2020.

As the numbers rose, the country turned its scarces foreign exchange to buying wheat from other countries. A report from the Nigeria Office for Trade Negotiations showed that "durum wheat" was the second most imported item in the country in the second and third quarters of 2020.

"It is a shame on us that we cannot grow enough wheat in Nigeria despite all the available resources we have, all we need to do is to apply some level of science to up the yield," said Jonathan Oloniyo, a food science and technology expert who runs a bakery in Abuja. "Have you seen any country making success in agriculture without applying science and technology? No one!"

Wheat is a cereal widely cultivated in many countries. It is typically milled into flour which is then used to make a wide range of foods including bread, noodles, pasta, biscuits, cakes, pastries, crisp-breads, among others. It is relatively high in protein compared to other major grains, experts say.

In Nigeria, wheat is grown mostly in Borno, Bauchi, Yobe, Kano, Jigawa, and Zamfara States.

In 2020, amidst the impact of the COVID-19 lockdown, the prices of bread rose in the country by at least 14 per cent. A loaf of bread that previously sold for N350 has since then sold for N400 in Abuja.

CHALLENGES

Mohammed Salim, the president of the Wheat Growers Association of Nigeria, could not be reached on Wednesday. He was quoted by Daily Trust in July 2020 as saying that the lack of quality seeds had been the major challenge of the crop in Nigeria.

"One of our challenges is getting quality seeds every two years. Wheat is an open-pollinated crop, the maximum you can do with a particular seed is four years or thereabout, so if the government can finance the research institutes to come up with new varieties every two years, that will sustain production and keep the farmers in business," the paper quoted him as saying.

In November 2020, the Flour Milling Association of Nigeria said it was set to intensify its collaborations with private agriculture development institutions -Oxford and BabbanGona to boost wheat production through its out-growers scheme for 8,000 smallholder farmers in Kano, Jigawa, and Kebbi, BusinessDay reported.

Mr Oloyino, who is also the managing director of JPillar Bakery, said using mechanised farming and provision of adequate security to farmers by the government will increase the country's agricultural production.

"We should be more deliberate as a nation to support more mechanized farming in Nigeria, secure our farmlands and give farmers subsidies and Grants and also encourage our researchers and students on making discoveries on how to better bring yields to our crops," he added.-Premium Times.

Nigeria: We Should Stop Foreign Businesses Exploiting Our Markets - Buhari

Abuja — President Muhammadu Buhari has directed those responsible for the collection of taxes to ensure that foreign companies operating in Nigeria must not be allowed to continue to exploit the markets and economy without paying appropriate taxes.

To this end, President Buhari has directed the Federal Inland Revenue Services, FIRS, and related government agencies to plug all revenue leakages by ensuring strict compliance of tax payments, urging the deployment of more digital platforms and seamless connections.

This is as the President has explained that his administration resorted to deficit budgeting as a result of declining revenues for some years resulting to increase in Nigeria's debt profile

President Buhari, who gave the directive on Thursday in Abuja during a virtual First National Tax Dialogue at the Conference Hall of the State House, ordered all government agencies to automate operations and ensure more synergy in advancing the interest of the nation in revenue generation.

The President was quoted in a statement issued by his Special Adviser on Media and Publicity, Chief Femi Adesina as saying, "It is not enough that our citizens and local businesses pay their fair share of taxes. Equally, foreign businesses must also not be allowed to continue to exploit our markets and economy without paying appropriate taxes.

"Accordingly, the FIRS has my mandate to speedily put all measures in place to fully implement programmes to stamp out Base Erosion and Profit Shifting in all their ramifications and generally automate its tax processes.

"In line with this, I have directed all government agencies and business enterprises to grant FIRS access to their systems for a seamless connection.

"FIRS must ensure that its deployment of technology for automation is done in line with international best practices. In particular, FIRS can borrow a leaf from other countries which have successfully automated their tax processes."

The President said Nigeria will continue to work with the Inclusive Framework (on equal footing) to develop internationally acceptable rules for taxation of the digital economy while hoping that "the Inclusive Framework would have evolved into an acceptable multilateral solution that will comprehensively address the tax challenges of the digitalised economy by the middle of 2021."

President Buhari assured citizens that the government will continue to pursue its mandate of improving lives through investments in infrastructural projects like railways, roads, electricity, healthcare and education, in spite of dwindling revenues and the challenge of coronavirus.

"Our government has continued to pursue all those projects despite the massive decline in government revenues occasioned by a combination of factors among which is the COVID-19 pandemic.

"The devastating effect of COVID-19 on the health and economy of the world is evident across every stratum of our society. It is obvious to every citizen of this country that our economy is not immune to the global economic downturn.

"As such, we have had to confront the conflicting situations of reflating the economy and at the same time raising revenue to meet our budgetary needs. It is within this context that the government undertook an expansive budgetary projection of over N13 trillion for 2021."

Increase in the debt profile

The President said the government had "inevitably resorted to deficit budgeting as a result of declining revenues for some years," resulting to increase in Nigeria's debt profile.

He said, "As we might expect, this has led to increasing in Nigeria's debt profile which stood at about N32 trillion in September 2020. This funding gap created by the dwindling government revenue therefore underscores the importance of the national tax dialogue we are holding today.

"No nation has ever made progress without having to pay for it or make the necessary sacrifice. I, therefore, call on all Nigerians to be alive to their tax obligations.

"This government is strategically restructuring the tax revenue mix in favour of indirect taxes in accordance with our national tax policy document. To this end, FIRS is mandated to do all that is required in order to efficiently collect tax revenue due from transactions carried out using local and foreign online platforms. The government has made relevant statutory amendment to tax laws in the Finance Act 2020."

While urging all citizens to play more active roles in nation-building by paying their taxes, the President said "the administration is, however, not seeking to increase the tax burden upon the citizens but to plug the existing tax loopholes or leakages and to ensure even and equitable application of the tax laws."

According to him, "this was clearly demonstrated by the provisions in the Finance Act 2019 whereby government exempted small companies from tax and reduced the income tax rate for medium companies from 30% to 20%.

"In the Finance Act 2020 which I signed into law at the tail end of 2020, we went further to cushion the burden of tax on the low-wage workers by exempting minimum wage from personal income tax."

He said necessary amendments had been made to the FIRS Establishment Act in the Finance Act 2020 in order to provide the legislative framework for the adoption of technology in tax administration.

"Every Nigerian must see tax payment in its proper context, which is, as a solemn and patriotic obligation that is necessary for building a better society."

In his keynote presentation, President of the African Development Bank (AfDB), Dr Akinwunmi Adesina, projected a rebound of the Nigerian economy from recession, with a 1.5 per cent growth rate in 2021, and 2 per cent growth in 2022.

Dr Adesina said taxes should be employed as instruments for promoting development by encouraging private sector companies to take up responsibilities in infrastructure, and attracting Foreign Direct Investments, admonishing that prolonged tax holidays could be counterproductive.

He said youths should be incentivised to grow businesses with appropriate tax regimes, adding that Africa loses about 60 billion US dollars annually from taxes.

Minister of Finance, Zainab Shamsuna Ahmed, said the government will improve its template for tax collection, especially in the face of dwindling revenues due to the coronavirus pandemic, describing 2021 as a year of recovery for the economy.

The minister noted that emphasis on tax collection will be shifted from income to spending and all multinational corporations in the country will be required to fully comply with new directives.

The FIRS Chairman, Muhammad Mamman Nami, called for a new, comprehensive tax payment culture.-Vanguard.

Africa: AfDB, EIB Seal Deal to Enhance Africa's Development

The African Development Bank (AfDB) and the European Investment Bank (EIB) yesterday signed a joint partnership action plan on how to boost public and private sector investment in Africa.

The joint action plan enables both institutions to grow a shared pipeline of bankable projects around key complementary themes to which each institution would bring their comparative advantage.

According to a statement, the focus of the partnership are: climate action and environmental sustainability; transformative large-scale quality infrastructure investment; Information and Communication Technology (ICT) infrastructure and services; financial inclusion with a gender lens aimed at the empowerment of girls and women; education and training; and the health sector.

The signing comes amid the ongoing COVID-19 pandemic which is increasing poverty across the African continent and threatening markets and livelihoods, heightened the urgency for action, the statement added.

The agreement was signed by AfDB's Acting Senior Vice President, Bajabulile Swazi Tshabalala, and EIB's Vice President, Thomas Östros, during a virtual ceremony attended by stakeholders from across Africa and Europe.

The session was preceded by a short roundtable between the two senior management members and representatives from both institutions.

"It is crucial that more multinational development banks and other development finance institutions commit to closer and stronger collaboration, such as seen through this Joint Action Plan between the AfDB and the EIB, in order to more efficiently and effectively support our regional member countries during these troubling times," said Tshabalala.

"Sustainable economic growth and security in regions facing particular challenges, such as the Sahel and Horn of Africa, are our top priority."

"Partnerships are crucial for the EIB's business and impact, and this partnership with Africa's Bank is crucial for Africa. The Action Plan signed with the African Development Bank today demonstrates the firm commitment of the European Investment Bank, the EU Bank, to delivering investment that makes a real difference to Africa.

"Enhancing our work with the African Development Bank, Africa's multilateral development bank, is a strategic priority for the EIB and Europe. Together the EIB and AfDB will enhance cooperation and engagement with African partners to ensure that Africa emerges from the health, social and economic challenges of COVID-19 to an even brighter 21st Century," Östros said.

The Joint Action Plan was developed following an EIB delegation meeting with the African Development Bank in February 2020.

The plan reflects the Bank's High 5 development priority areas as well as EIB's priority areas for Africa.

According to the statement, in the wake of COVID-19 both institutions had devoted financing for rapid response to meet budgetary and health needs of countries in the region.

"Over the past five years, the shared portfolio of the two institutions has grown to €3.4 billion, leveraging investment totaling €10.2 billion for 26 projects across the continent. The EIB and African Development Bank recognise the unique role of publicly owned development banks in supporting high-impact and pioneering investment and mobilising private sector financing.

"Recent cooperation to increase venture capital financing for innovation and technology companies through the Boost Africa initiative and commitment to the Desert to Power programme highlights how public banks accelerate financing in priority policy areas," the statement added.-This Day.

Kenya, Britain Ink Sh8billion Affordable Houses Deal

Kenya is to receive at least Sh8 billion from the United Kingdom for putting up affordable houses.

UK Foreign Secretary Dominic Raab, who is in Nairobi, said the funding is part of London's support for President Uhuru Kenyatta's vision of providing 100,000 affordable housing units to Kenyans.

Of the amount that is to be disbursed in batches, some Sh1 billion will be from UK-funded InfraCo and the remaining from private companies, both part of the British government's investment in infrastructure in Africa.

"The £53 million agreement will mean affordable housing for 10,000 Kenyan families. The project is through Acorn Housing. President Kenyatta attended the launch of Kenya's first green bond on the London Stock Exchange by Acorn a year ago," Mr Raab said yesterday.

The Foreign Secretary, who is on his first official visit to Kenya, also announced an additional Sh7.2 billion towards the mitigation of climate change across the country, as well as another Sh24 billion for the expansion of digital connectivity on the continent.

The visit by the minister comes on the backdrop of a historic exit deal signed between British Prime Minister Boris Johnson and the European Union in December, ahead of the lapse of the Brexit transition period.

Kenya and the UK are negotiating a five-year strategic partnership signed in January 2020.

Strengthen relations

The deal, officials say, is expected to strengthen relations between the two countries post-Brexit.

According to the deal signed by Mr Kenyatta during his visit to Britain, the two nations will help each other in matters education, trade, counter-terrorism, and security among others.

Strong partnership

Foreign Affairs Cabinet Secretary Raychelle Omamo said the visit by Mr Raab is aimed at reaffirming and promoting the agreement.

"Kenya has a strong partnership with the UK on a number of fronts. Our meeting sought to reflect on these areas of cooperation, ranging from economic partnership to security and climate interventions," Ms Omamo told journalists yesterday.

The National Affordable Housing Project -- launched by the President in 2018 as part of the Big Four Agenda -- sought to build at least 500,000 homes in two years. Its implementation, however, has been rocked by lack of funds, despite huge allocations from the National Treasury, including a Sh15.5 billion set aside last June.

Deepening partnership

Mr Raab said the United Kingdom had also signed a new partnership with Health Cabinet Secretary Mutahi Kagwe aimed at increasing collaboration in the fight against the Covid-19 pandemic.

"The UK has provided technical assistance to the Ministry of Health to help prepare for the coronavirus vaccine roll-out in Kenya," the Foreign Secretary told reporters.

"It will ensure the vaccine gets to those who need it as quickly as possible."

Ms Omamo said Kenya looks forward to deepening the relations between the two countries.

"The partnership should be strong, especially in health, where issues around fighting Covid-19, including the vaccine initiative, are in focus," the CS said.-Nation.

Ghana: British Airways Plans to Move Accra Flights to Gatwick Denied

The Ministry of Aviation says it has rejected British Airways (BA)'s plan to move the London-Accra-London flights from the Heathrow Airport to Gatwick Airport this summer.

The Ministry in a press release issued on Tuesday, said the "The Ministry in a letter to the BA Authorities, rejected the changes and categorically informed British Airways that 'for the avoidance of doubt, we are unable to accept the change in the London-Accra-London flights originating from Gatwick Airport."

The statement said BA in a letter to the Ministry said it had decided to operate the airline's Ghana services from London Gatwick Airport.

Following this, the statement said the Ministry convened a meeting under the instance of the sector Minister, Mr Joseph Kofi Adda, to discuss the matter.

The statement said at the meeting, the BA team promised to provide further information and data analysis to support their reason for the changes from Heathrow Airport to Gatwick.

"The BA team is yet to provide any information as promised," the statement said.

Consequently, the statement said the Ministry, in a letter to the BA authorities, rejected the changes and categorically informed BA that "for the avoidance of doubt, we are unable to accept the change in the London-Accra-London flights originating from Gatwick Airport."

Industry watchers are of the view that BA's decision to move Ghana's services to Gatwick was to cut cost.

They said the airline industry had been hard hit by the coronavirus pandemic hence the need to adopt effective and efficient measures to stay in business and remain competitive.

British Airways, facing slumping demand due to coronavirus, has secured a £2 billion (S$3.6 billion) loan, the parent group IAG.

BA, which is slashing thousands of jobs as it battles to survive fallout from the deadly COVID-19 pandemic, also currently faces industrial action in a pay dispute with cargo workers at London's Heathrow airport.

International Airlines Group (IAG) announces that British Airways has received commitments for a five-year term-loan Export Development Guarantee Facility of £2 billion underwritten by a syndicate of banks, partially guaranteed by UK Export Finance (UKEF).

British Airways expects to drawdown the facility in January 2021 subject to agreement of final terms with the lenders and UKEF.

UK Export Finance is a state-backed agency which guarantees finance for British companies in order to help them win valuable exports.

The loan, which includes restrictions on dividend payments by the airline to IAG, is aimed at helping BA tap into an anticipated vaccine-driven recovery in global aviation next year.-Ghanaian Times.

Mozambique: Maputo Port Reports 13 Per Cent Decline in Cargo

Maputo — The amount of cargo handled by the port of Maputo in 2020 declined by 13 per cent, in comparison with the 2019 figure.

According to a Thursday press release from the Maputo Port Development Company (MPDC), 18.3 million tonnes of cargo was handled by the port in 2020, as against 21 million tonnes the previous year.

MPDC attributed the decline to the effects of the Covid-19 pandemic, and the measures taken to halt the spread of the disease, notably the closure of the borders and the first South African lockdown.

Despite the pandemic and the lockdown, there was a 33 per cent increase in the export of chrome and ferro-chrome through the port. MPDC says one positive aspect of the pandemic was that it stimulated a switch of exports of bulk chrome and ferro-chrome from road to rail transport. The proportion of these minerals moved by rail increased from 20 to 25 per cent between 2019 and 2020. The release also attributed this change to greater efficiency of the port and of the Mozambican and South African rail companies, CFM and Transnet.

Despite the decline in traffic flowing through the port, MPDC stresses that it fully supports the measures taken to contain the pandemic. "One of the main values of our company is respect for human life and we believe in caring for our workers and for our fellow countrymen, declared the MPDC Managing Director, Osorio Lucas, cited in the release.

"The battle against the pandemic can only be won, if all of us wage this struggle", Lucas added.

He stressed that, despite the decline in traffic and the financial contingency measures MPDC had to adopt, "we have maintained our commitment to invest in the expansion and rehabilitation of port infrastructure".

The investments undertaken in 2020 included the rehabilitation of quays, dredging the quays to a depth of 16 metres, and the expansion of rail capacity. These projects are in their concluding phase, and Osorio said they will be delivered in the second half of 2021.

The challenges imposed by the pandemic, he added, "have opened the path to implementing solutions of automation to improve the management of port traffic".

For 2021, MPDC is "cautiously optimistic" about a recovery. Lucas said that, despite the effects of the pandemic, "we are convinced that we shall harvest the fruits of our investment in port infrastructure and in technological solutions".

Invest Wisely!

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INVESTORS DIARY 2021

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Date & Time

Companies under Cautionary

ART

PPC

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Starafrica

Fidelity

Turnall

Medtech

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Nampak Zimbabwe

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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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