Major International Business Headlines Brief::: 12 December 2023

Tue Dec 12 08:29:50 CAT 2023

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Major International Business Headlines Brief:::  12 December 2023 

ü  Kenya Power Says Electricity Restored in Most Parts of the Country

ü  Nigeria's Electricity Grid Collapses

ü  Uganda: Revolutionizing Teso's Cassava Landscape

ü  Nigeria: Tinubu's 2024 Budget Offers Little to No Hope

ü  Kenya: Rice Farmers Counting Heavy Losses Due to Floods

ü  Kenyan Investor Raises Alarm Over Changing Banking Trends On Borrowing

ü  Nigeria: CBN Says Nigerian Banks Resilient - Suspends Deposit Charges

ü  Uganda: Unpaid Salaries Worry Busia Teachers As Xmas Looms

ü  Tanzania: Agriculture At the Centre of Rising and Falling and Rising

ü  South Africa: Picket Against Fossil Fuels At Muizenberg Beach

ü  Uganda: Bou Keeps Interest Rates Unchanged

ü  East Africa: Over 300 Kenyan MSMEs Showcase Products at EAC Trade Fair

ü  Nigeria: Adjustment in Customs Exchange Rate Will Hurt Businesses - CPPE

ü  Nigeria: No Plan to Increase Tax - Minister

ü  Google loses monopoly case to Fortnite maker Epic Games

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Kenya Power Says Electricity Restored in Most Parts of the Country

Nairobi — Kenya Power has announced that they have managed to restore power in most parts of the country, and restoration of power in the coast and the remaining sections of Nairobi is still ongoing.

According to a customer alert by Kenya Power issued Sunday night, power has been restored in parts of Nairobi, Kisumu, Busia, and Siaya.

''Several areas in Nairobi city and its environs are already back on electricity supply. These include Parts of Ruaraka, Embakasi, JKIA, Parklands, Dornhom, Umoja, Huruma, Westlands, Syokimau, and Dandora.

Sections of Kisumu, Busia, and Siaya are also back in Supply,'' the company stated.

At 2:10am, the company reported that they had managed to restore power for the whole of Mt Kenya region, South Nyanza, Western, Central Rift, North Eastern, and most parts of Nairobi.

However the company stated that restoration of power for the coast region and sections of Nairobi is still ongoing.

''We are glad to report that power supply has been restored in the whole of Mount Kenya, southern Nyanza, western, central rift, North Eastern and most parts of Nairobi, Restoration for coast region and sections of Nairobi is ongoing,'' stated the company.

The power break outage which marks the third nationwide power blackout, in a span of three months, is a result of what they say is a suspected fault that is affecting the power system.

''We have lost electricity supply to various parts of the country due to a suspected fault affecting the power system,'' it stated.

-Capital FM

Nigeria's Electricity Grid Collapses

"The collapse happened by 13.49 this afternoon. It is now fully restored by 18.51,'' an official said.

The Transmission Company of Nigeria (TCN) says the national grid experienced a system collapse on Monday.

The TCN confirmed the development in a message by its General Manager, Public Affairs, Ndidi Mbah.

''The grid experienced a collapse today. Presently, it (supply) has been restored except for the Jos Axis, which will soon have supply within the hour. The collapse happened by 13.49 this afternoon. It is now fully restored by 18.51,'' she said.

The latest collapse is coming months after the national grid system collapsed in September and Nigerians were thrown into darkness.

The collapse in September came weeks after the TCN announced that the country's power grid had maintained uninterrupted stability for over 400 consecutive days.

The TCN had in August said the Nigerian power grid recorded an unparalleled period of stability in the history of the power sector, operating without any major disruptions or systems collapse for an impressive span of 400 consecutive days and counting.

''This milestone signifies a remarkable advancement in the nation's efforts at strengthening its power infrastructure and ensuring a reliable and dependable electricity supply to distribution load centres for onward distribution to electricity customers nationwide,'' the company said.

In recent years, the power sector has experienced broad challenges such as electricity policy enforcement, regulatory uncertainty, gas supply, transmission system constraints, and major power sector planning shortfalls.

In 2022 alone, the country's national grid collapsed eight times.

-Premium Times.

Uganda: Revolutionizing Teso's Cassava Landscape

In the heart of Teso's vast cassava fields, a revolutionary movement is sweeping through, driven by the relentless spirit of local farmers determined to turn their abundant cassava harvests into economic opportunities.

Augustine Akutu, a prominent cassava farmer in Amuria District, spearheads this charge with over 500 acres dedicated to cassava cultivation.

Despite being a cassava powerhouse, farmers like Akutu face significant challenges due to the lack of proper storage and processing facilities, leading to substantial losses during each harvest season.

Akutu, who spends most of his time at his cassava plantation, emphasizes the urgency of addressing these issues.

''Without proper facilities, we're losing tons of cassava every season. We need a solution to unlock the full potential of our harvests,'' declares Augustine Akutu.

Tom Awuko, another cassava farmer, echoes this sentiment, emphasizing the pressing need for value addition factories to prevent wastage.

The call for action has resonated with State Minister for Works, Musa Ecweru, the second-largest cassava farmer in the Teso sub-region.

Recognizing the productivity of the area, Minister Ecweru responds swiftly to the farmers' plea, acknowledging the need for a state-of-the-art cassava processing facility.

''We envision a facility that transforms cassava into various value-added products, including flour, starch, biofuel, and exports,'' says Musa Ecweru, highlighting the potential benefits.

The proposed factory holds the promise of employment opportunities, increased income, and improved quality of life for the entire community.

''This is not just about cassava; it's about transforming our community and creating a sustainable future for generations to come,'' states Minister Ecweru.

The call for a cassava factory extends beyond the farming community, uniting residents seeking an alternative to the disappointments faced in the fruit and citrus industry.

The envisioned facility emerges as a beacon of hope, promising a brighter future for Teso's economy.

As the momentum builds, the collective voice of Teso's farmers reverberates through the fields, demanding a transformation that goes beyond abundance--a transformation that promises economic prosperity for one of Uganda's cassava-rich regions.

The journey towards a thriving cassava industry has just begun, fueled by the determination of those who till the soil for a brighter tomorrow.

Nigeria: Tinubu's 2024 Budget Offers Little to No Hope

A review of Mr Tinubu's 2024 budget shows it violates Nigeria's fiscal law and offers little hope of a better future for citizens.

Background

A budget is a vital tool for achieving a country's economic strategy. It is designed to shape its entire socio-economic landscape for the year and the future, with the budget allocation serving as a guide for the government's long-term economic vision. Simply put, the budget is really about how much revenue the government collects, what the revenue will be used for, and how shortfalls - deficits - between revenue and expenditure will be met (in this case, through debt accumulation). It is a powerful tool for the assessment of the transparency of the management of public finances. In this regard, various constitutional and legal provisions require the government to meet certain bars, thresholds and limits to ensure that the budgetary process ensures economic stability, debt sustainability, and prosperity for all.

In this analysis, we will review President Bola Tinubu's proposed 2024 budget, assess the compliance of the budgetary process with legal and constitutional provisions, and conclude with a position on what the 2024 budget means for Nigeria's economic revival. One should provide a caveat that the federal government budget is not representative of the aggregate fiscal stimulus in the economy. State and local governments also stimulate the economy through taxes, programmes and projects. Without the consolidated budget of the states and local governments, this analysis is focused on the federal budget, which accounts for around 85 per cent of aggregate fiscal stimulus.

Key Aggregates and Assumptions in the 2024 Budget

How much does the FGN expect to collect?

The aggregate FGN revenue is projected at N18.32 trillion. Oil revenue is projected to increase by 344 per cent, relative to 2023, while revenue derived from the non-oil sector - corporate income tax, VAT, import and customs duty, etc - is projected at a 54 per cent increase over the 2023 forecast.

How does FGN plan to allocate its expenditure?

Aggregate expenditure is estimated at N27.50 trillion. The 2024 expenditure estimate includes statutory transfers of N1.30 trillion and non-debt recurrent expenditure of N10.26 trillion. Debt Service and Sinking Fund to retire maturing bonds issued to local contractors/creditors will cost N8.25 trillion and N243 billion, about 45 per cent of the expected total revenue.

Under the recurrent category, a total of N6.48 trillion (inclusive of N1.02 trillion for GOEs) is provided for personnel and pension costs. The aggregate amount available for capital expenditures in the 2024 budget is N8.70 trillion, higher than the 2023 provision of N8.43 trillion. There are further breakdowns on allocations to specific ministries.

How does FGN plan to finance the revenue shortfall relative to planned expenditure in the 2024 budget?

The 2024 budget deficit is projected at N9.18 trillion or 3.88 per cent of GDP, lower than the N13.78 trillion deficit recorded in 2023, mainly because of higher projected oil receipts. The deficit is projected to be financed from borrowings totalling N7.83 trillion, N298.49 billion from privatisation proceeds, and N1.05 trillion from the drawdown on multilateral and bilateral loans secured for specific development projects.

The underlying macroeconomic assumptions in the 2024 budget estimates are as follows.

- The average price of crude oil in the international market for the year will be $73.96 per barrel (pb).

- Oil production will average 1.78 million barrels per day (mbpd).

- The exchange rate of the naira to the US dollar will hover around ₦700/$1.

- The Gross Domestic Product (GDP) will grow by 3.76 per cent after adjustment for inflation.

- The country's inflation rate will average 21 per cent.

Key Takeaway: The Numbers in the 2024 budgets do not add up.

A close look at some of the estimates throws up some questions and concerns regarding historical performance, underlying assumptions and the economy's direction.

Revenue

The projected increase in federal revenue is overambitious relative to past trends, but one can justify some of the increase. The projected increase in oil sector revenue can partly be explained by applying a depreciated exchange rate to a higher daily oil production target than in the 2023 budget. Furthermore, some new previously uncollected sources of revenue, such as from the Development Bank of Nigeria and Galaxy Backbone, also add to higher revenue in 2024.

Nonetheless, the revenue assumptions may not be realisable. First, the daily oil production target of 1.78 million barrels in 2024 budget appears ambitious in an environment where daily oil production has averaged 1.2 mbpd for over two years. Achieving a daily average increase of more than 500,000 barrels per day in one year is a substantial challenge, given the recent decline in oil production, activities of illegal refineries, oil theft, and a weak external market. Furthermore, an undisclosed amount of oil receipt is already tied to swaps and forward contracts that will not accrue to the federation account in the foreseeable future. Similarly, non-oil receipts, especially from corporate income tax, have been pre-collected over the past few years in the ''infrastructure for tax swap programme''. These all show that the revenue assumptions are either mere book entries or unrealistic.

Finally, the fiscal framework is unclear about the impact of subsidy removal on the budget. So, it is not immediately apparent that the sector has additional revenue due to subsidy removal. For example, the 2023 budget assumes a net oil revenue of 49 per cent after expending 51 per cent on cost, which included subsidy and operational costs of the oil company, 13 per cent derivation, and transfer to the Nigeria Police Trust Fund. In the 2024 budget, the projected ratio of net revenue to cost is 70 per cent to 30 per cent. While this appears to be an improvement, to the extent that other factors such as exchange rate and higher daily production assumptions contribute to the increase in the oil receipt, it is unclear whether or not the subsidy removal is making its way into the budget.

The same lack of realism is betrayed in the numbers on the non-oil revenue. A 45 per cent projected increase in income and consumption taxes in 2024 appears to be detached from the current economic realities. Projections for companies' income tax (CIT), value-added tax (VAT), Import and Customs duties, the tax base of which are primarily driven by domestic demand pressures, appear oblivious of the decline in economic activities, closing down of factories, and lower consumption of VAT related goods due to ongoing economic hardship. Under the circumstances, the potential of achieving a 58 per cent increase in CIT or 225 per cent in consumption-based taxes is unrealistic, to say the least.

Expenditure

On the capital budget, in dollar and real value terms, the N8.7 trillion capital budget is much less than the N8.4 trillion capital budget of 2023. If one assumes that half the capital budget is based on imported components, which is now affected by a steep devaluation, and the other half is domestic input, which is now costlier due to domestic inflation of over 22 per cent, then the real purchasing power of the 2024 capital expenditure is about 67 per cent lower than the 2023 capital expenditure. In this event, it will be misleading to suggest that the capital budget has increased over that of last year. From the point of view of costs alone, citizens should brace for reduced government services and stimulus.

Some curious patterns in the capital expenditure budget merit further clarification. Some items, such as the capital expenditure of ministries, departments and agencies (MDAs), and state-owned enterprises (SOEs), appear to have increased in the predictable and realistic trend of around 10 per cent from the previous year. But the increase in some items defies economic logic. Grants and donor-funded programmes are projected to increase by 1,400 per cent (from N43 billion in 2023 to N585 billion) relative to 2022. Similarly, 100 per cent growth for capital expenditure of statutory transfers and TEFUND capital expenditure. Given these substantial growth trends, it would help to explain further why projects can be ramped up so quickly in a 12-month time frame.

Deficit

The projected fiscal deficit of 3.88 per cent of GDP will likely be underestimated at the end of the day, given the over-optimistic revenue projections and if the ambitious benchmark assumptions adopted do not materialise. Thus, the projected borrowing requirement of N7.8 trillion may require supplementary loans in 2024. Evidently, such additional loans will seriously challenge the government's capacity to service current debts.

More importantly, it is concerning that a new government prefers to ramp up deficit spending in its first full-year budget. The realistic and prudent thing to do is to spend the first two years stabilising the economy by incentivising production. Higher production levels will increase the revenue base, create employment and enlarge people's purchasing power. Subsequently, the momentum from these policies will put the economy on a path of fiscal responsibility as the tax base expands.

Constitutional and Legal Public Finance Management Regulations

The 2024 budget process breaches a few requirements of public finance management, including the Fiscal Responsibility Act (FRA) in a few areas. It is as if, at every step of the way, the government was determined to sidestep the law with the connivance of a supportive legislature. A few highlights are as follows:

The borrowing plan for the MTEF: In November, the President sought Senate approval for $7.86 billion and 100 million euros ($105.40 million) for the 2024-2026 borrowing plan. Key provisions of the FRA were disregarded in the process. The request did not indicate the potential sources of the debt and their potential uses. The borrowing plan may also have violated the FRA in other areas: critical supplementary details on the repayment plan, with pre-project and feasibility studies, cash flow statements and Environmental Impact Analysis were not made available. These are documents that would have to be produced by both creditors and line ministry and FMF officials before creditors part with their money and reach agreements. The Senate should have rejected a borrowing plan that does not satisfy these basic requirements in the first place. Furthermore, there is no way to assess whether the process complies with the FRA provision on what the government can finance by debt since the information was not provided to the Senate.

The 2024 budget is in breach of the FRA with respect to the size of the deficit, which at 3.88 exceeds the legal limit of 3.0 per cent.

Renewing the prospect for economic revival and revitalisation

A review of Mr Tinubu's proposal suggests that any hope of a better future cannot be based on the 2024 budget. Nothing in the budget indicates that the government is about to set Nigeria in a direction different from the recent past. The lack of commitment to reviving private investment and production is too glaring. There is hardly any concern about the inflationary consequences of the fiscal policies, or at least there is no discussion of it. Citizens should brace for a more challenging year ahead.

-Premium Times.

Kenya: Rice Farmers Counting Heavy Losses Due to Floods

Kisumu — Rice farmers within the West Kano Irrigation Scheme are staring at a Sh50 million loss after flood water marooned rice under farms.

The scheme chairman Jared Odoyo says rice crop within the 650 acres is now wasted as the region continues to receive heavy amounts of rains.

Odoyo says farmers took loans from banks and other micro finance institutions to develop their farms, which are now in ruins.

''Farmers are at crossroads since they must repay the loans and with schools opening next year, it is going to be a disaster,'' he said.

He says the bumper harvest they had hoped to get in January next year is now a dashed hope.

Odoyo says the outlet pump too has failed to cope up with the magnitude of water as he appealed to both the county and national governments to assist farmers by acquiring a new pump.

''The outlet pump has been a problem to the farmers for two decades, it is a source of misery to the farmers and we would like to have a new pump bought,'' he said.

While addressing the press at the scheme, the farmers hailed the appointment of the substantive chief executive officer for National Irrigation Authority (NIA), whom they say will now drive the enhancement of rice production and food security in the region.

The Ministry of Water, Sanitation and Irrigation late last month picked Eng. Charles Muasya as the CEO for NIA.

However, a farmer hailing from the Wes Kano Scheme has moved to the employment court in Kisumu to challenge the appointment of Eng. Muasya.

The farmers distanced themselves from the complainant noting that records do not indicate that he is a rice farmer in the region.

''We have gone through the list of our members and the name that has gone to court and purporting to be a farmer from tis scheme is not our member,'' said Odoyo.

Odoyo says they have faith in the new CEO who has visited them on many occasions during his time as the acting CEO.

''What farmers want is service delivery to the people, the government is the appointing authority and if Eng. Muasya has been picked as the best, then we are behind him,'' he said.

The farmers noted that they will not be dragged into the politics of NIA but will work with whoever is chosen by the government.

''We want the new CEO to help us address challenges affecting us at the scheme, let him come help us fix the new pump to get this flooded water out into Lake Victoria,'' he said.

Joseph Yogo, a farmer, appealed to the new incoming CEO to liaise with the Kenya Wildlife Services (KWS) to deal with the marauding hippopotamus that is wreaking havoc in their farms.

Yogo says besides floods, hippos are moving into their farms destroying everything in the farms.

''KWS has the capacity to ta these hippos, we have tried to keep them at bay but we have failed, we need help,'' he said.

-Capital FM.

Kenyan Investor Raises Alarm Over Changing Banking Trends On Borrowing

Nairobi — In a surprising twist within Kenya's banking sector, a notable shift is underway as financial institutions increasingly target guarantors rather than primary borrowers when loans face default.

This departure from conventional practices has ignited concerns, sparking fears about its potential repercussions for borrowers and those who stand as guarantors.

Financial Expert Nazir Jinnah on Monday said traditionally, guarantors played a secondary role, intervening only when the primary borrower defaulted.

''This approach was considered a last resort, with banks exhausting all options with the borrower before turning to the guarantor,'' Jinnah pointed out in a statement.

''A discernible change is underway, with reports indicating that certain Kenyan banks are actively pursuing guarantors, even when primary borrowers possess the financial means to repay.''

For example, he pointed out the case of English Point Marina which has suffered the fate of the worrying trend.

He said that English Point Marina was the primary borrower at the Kenya Commercial Bank (KCB), while Pinewood Beach Resort and Spa was its guarantor.

The bank has since put English Point Marina under receivership while a legal suit is underway challenging its intended takeover of Pinewood Beach Resort and Spa.

English Point Marina is owned by Amin Kanji, his wife Leila, brother Alnoor, sister-in-law Nafisa and Nazir Jinnah.The luxury property is located by the harbour and consists of 96 apartments, eight penthouses and a 26-room hotel.

It is one of the few private projects granted the Vision 2030 Private Sector Flagship status.

This shift, Nazir Jinnah said raises questions about the underlying motives and the potential consequences for both borrowers and guarantors.

He cautioned that the new shift towards guarantors could erode trust between banks and primary borrowers, who may feel unfairly targeted, especially if they have the means to meet their obligations.

Going forward, he said prospective guarantors, ''may become more cautious, knowing that banks might swiftly turn to them in case of default. This could impact the willingness of individuals to provide guarantees for loans.''

''Striking the right balance between risk mitigation and fair treatment of borrowers and guarantors is crucial for maintaining a healthy and sustainable banking environment.''

He added that, ''as this trend unfolds, stakeholders, including regulatory bodies, banks, borrowers, the Central Bank of Kenya and guarantors, must engage in meaningful dialogue to ensure that the interests of all parties are adequately protected.''

-Capital FM.

Nigeria: CBN Says Nigerian Banks Resilient - Suspends Deposit Charges

CAR assesses the available capital a bank possesses in relation to its risk-weighted assets.

The Central Bank of Nigeria on Monday dismissed reports alleging that some licensed commercial banks in the country failed to meet the Capital Adequacy Ratio, (CAR).

A statement by the bank's spokesperson, Sidi Hakama, said that key financial soundness indicators which reflect the stability and resilience of the sector, as detailed in its most recent Economic Report of 2023, remain well within the regulatory thresholds.

The adequacy ratio offers a swift assessment of whether a bank holds sufficient funds to offset potential losses and maintain solvency amid challenging financial conditions.

''We wish to clarify that the Nigerian banking industry remains resilient as key financial soundness indicators were within the regulatory thresholds as captured in the CBN's most recent Economic Report of 2023,'' the CBN said.

The apex bank added that it is actively collaborating with various critical stakeholders to sustain the level of confidence in the Nigerian financial sector.

The CBN reassured Nigerians of the strength and reliability of the banking industry, urging them to rely on official communications from the CBN for accurate information.

Cash deposit

Meanwhile, the bank also on Monday announced the suspension of cash deposit processing fees above N500,000 until April 2024.

This was disclosed in a circular signed by Adetona Adedeji, CBN acting director of banking supervision.

''The Central Bank of Nigeria hereby suspends the charging of processing fees of 2 percent and 3 percent previously charged on all cash deposits above these thresholds with immediate effect. This suspension shall remain in effect until April 30, 2024,'' the circular reads.

The CBN had on 18 September 2019 introduced a 3 per cent processing fee for withdrawals and 2 per cent for deposits of amounts above N500,000 for individual accounts to promote cashless transactions.

-Premium Times.

Uganda: Unpaid Salaries Worry Busia Teachers As Xmas Looms

A crisis is unfolding in Busia district as a significant number of secondary school teachers face severe financial hardship, unable to make their way home for the holidays due to unpaid salaries since October.

Among them is Jimmy Omviti, a teacher at Sukalikha Senior Secondary School, who laments the struggle to afford transportation to his upcountry home in the Arua district.

''I was supposed to be with my family in Arua by now, but lack of payment has left me stranded,'' says Jimmy Omviti.

Donald Oluk and Emmanuel Ouma, fellow teachers in the district, share Omviti's plight, highlighting the widespread nature of the issue.

''This isn't the first time we've faced salary delays; it happened last year too,'' adds Jimmy Omviti.

The district's political leaders offer mixed reactions, with some claiming the matter requires investigation beyond the district's scope, while others attribute the problem to a staffing gap.

''The delayed salaries issue needs thorough investigation; it might be beyond the district's control,'' says Stephen Wasike, District Chairperson.

However, Stephen Mayende, a District Councilor, points to internal staffing challenges as a possible cause.

''The district staffing gap could be contributing to these delays,'' suggests Stephen Mayende.

Efforts to seek clarification from the District Chief Administrative Officer were unsuccessful, as the official declined to comment.

Nevertheless, the Office of the Resident District Commissioner attributes the problem to a reduction in funds received by the district.

''We acknowledge the salary issue, and it's linked to a cut in funds allocated to the district,'' states Michael Kibwika, Busia Resident District Commissioner.

With over three-quarters of secondary school teachers affected the Resident District Commissioner assures the community that measures are being taken to expedite salary payments.

''We are doing everything possible to address this problem and ensure teachers receive their long-overdue salaries,'' reassures Michael Kibwika.

Out of a total of 260 government secondary teachers in Busia district, a staggering 216 have not received their salaries since October, leaving many educators grappling with financial uncertainty during the festive season.

The district now faces scrutiny over the recurring issue, raising concerns about the financial management affecting the livelihoods of its dedicated teaching workforce.

Tanzania: Agriculture At the Centre of Rising and Falling and Rising

IT'S hard to explain the history of Tanzania without speaking about the sector that not only employed the majority of the population, but acted as a driving force of an entire economy of the country.

In a speech by President Julius Nyerere in 1984 while inaugurating the Sokoine University of Agriculture, reminded them that it is farmers who are financing it.

He emphasised, ''Remember that the Sokoine University of Agriculture is owned by the peasants... of Tanzania and that these are poor people''.

To get a proper understanding of what really transpired in the country that is 62 years old today, I will divide our discussion into two phases; Infant and Grown-up phase.

Infant phase

This is the period that began from the year 1961 to 1991. At this time Tanzania was on the learning stage, as it studied the existing problems that affected the country and realised that the solution to this was to heavily invest in the most important sector, the agricultural sector. This gave rise to slogans like; ''Politics and Agriculture'', ''Agriculture is the backbone of the country'', ''Agriculture for life and death'' and so on and so forth.

This commitment was done under the banner of African socialism or Ujamaa in Swahili, enacted in the year 1967 under the Arusha Declaration banner. Jeannette Hartmann, a scholar from Hull University, in United Kingdom, enlightens more on 'Azimio la Arusha', on her paper titled; Development Policy - Making in Tanzania 1962-1982: A Critique of Sociological Interpretations, ''The Declaration had an emphasis on agricultural development, stressing self-sufficiency in food and socialist development''.

During this period the Government nationalised all the privately owned properties. Mr Dhiru Chauhan, a Moshi resident and one of the well-known agricultural enthusiasts in the country, wrote in one of the regional magazines recently, ''... in the wake of the Arusha Declaration some 52 farms in Northern Tanzania were nationalised overnight and their management was handed over to co-operative societies''.

This new-found spirit coupled with collectivisation of agriculture turned disastrous. Mr Sebastian Edwards, in his paper titled, ''Is Tanzania a Success Story?

A long-term analysis'', writes, ''The collectivisation of agriculture backfired, the villagisation process that forced peasants to move to villages designed by planners was strongly resisted by the population''.

The World Bank's World Development Report of 1991, just three decades after attaining its independence from Britain, Tanzania was ranked as the second poorest country in the world, just above Mozambique. While Nyerere attributed failure of Ujamaa to implementation as opposed to the doctrine itself, he contends that their reaction on agriculture was a mistake.

Mr Chauhan reports on the interview that Nyerere had with New Internationalist, October 1970, in which he was asked ''What were your main mistakes as Tanzanian leader? What should you have done differently?'' Nyerere replied, ''I would not nationalise sisal plantations.

That was a mistake. I did not realise how difficult it would be for the state to manage agriculture. Agriculture is difficult to socialise. I tried to tell my government that what traditionally belonged to the family in the village social organisation, should be left with the family, while what was new could be communalised at the village level''.

Grown up phase

At this stage, a lot was learnt and some new ideas had to be put in place. One of the quick steps taken by the post '91 administrations was to commercialise the agricultural sector, in the sense that all the decisions from pre-sowing to marketing to selling was left in the hands of individual farmers and their households.

This came after agreement with reality that agriculture in Tanzania was stagnant and unstable. To address the abovementioned challenges, the state started to privatise sisal plantations, among other state-owned estates to bring about more efficiency.

Further, in what could be termed as a silent repentance of public sins, the Government started to encourage farmers to belong to cooperatives and devised plans to form even more of them, the work is now under the Tanzania Cooperative Development Commission (TCDC).

In 1967 we hardly converted locally produced cotton into clothes. Nonetheless, the history changed when Tanzania built a number of textile mills to produce clothes and by 1975 alone, the country had 8 textile mills, capable of producing over 84 million square metres of cloth. While many have now been privatised and still exporting raw cotton, Tanzania is no longer in the place where it used to be as it has a sizable textile industry - though small - which is supplying clothing to the local market.

The manufacturing sector has generally grown in Tanzania. It used to account for about 8 per cent of the national income 1966, but now it stands at about 23 per cent and the biggest composition of raw materials come from farm products. If one would rate the country's progress, the honest and fair mark would have been, Satisfactory!

At least we have a history to learn from and a commitment to make necessary changes that will create a thriving atmosphere for the generations to come.

Zirack Andrew, National Co-ordinator, Tanzania Pulses Network (TPN),

-Daily News.

South Africa: Picket Against Fossil Fuels At Muizenberg Beach

South Africans joined the Global Day of Action for climate justice on Saturday 9 December, with gatherings in Cape Town, Durban, Knysna, and Saldanha Bay, among others.

About 100 people picketed at Muizenberg beach with placards that read ''No ocean, no life'' and ''We say no to oil & gas exploration''.

Later in the day, the crowd was bemused by a man, who appeared to be part of the picket. He fired a flare gun from the beach and then was arrested.

The protest coincided with the COP28 summit taking place in Dubai from 30 November until 12 December 2023. COP28 is an international summit held annually to assess its countries' climate change progress. Consensus on the phasing out of fossil fuels has been a priority at COP28.

Liz McDaid of the environmental organisation The Green Connection emphasised the need for South Africa to move away from fossil fuels and transition to renewable energy.

''We have to put the power back in the hands of the people. We have to take it away from the corporations,'' said McDaid.

Wendy Pekeur of the Ubuntu Rural Women and Youth Movement said that fishers who have lived in coastal towns for generations will lose their livelihoods if fish are driven away by seismic surveys and oil and gas drilling.

Pekeur also works with communities in the Northern Cape. The province has a contentious history with mining, which Pekeur likened to oil and gas exploration. ''Where are mine companies today? They became rich and the surrounding communities have nothing to show for it,'' she said.

She pointed out that South Africa is the highest carbon polluter in Africa, and called for a move away from fossil fuels.

Greenpeace volunteer, Elaine Mills, said that we should move towards clean energy. The International Energy Agency (IEA) has said that no new oil and gas should be extracted if we are to globally reach net CO2 emissions by 2050.

''We can see the impact of climate change daily,'' said Mills. She said that oil and gas projects often do not actually uplift South Africans from poverty or bring jobs, because most of what will be extracted will get exported.

Gabriel Klaasen, of the African Climate Alliance, said that further oil and gas exploration means ''we've given up on ourselves'' and ''we've given up on future generations who will have to inherit the damage and destruction''.

-GroundUp.

Uganda: Bou Keeps Interest Rates Unchanged

Kampala, Uganda — On Dec.6, the Bank of Uganda (BoU) kept the central bank rate unchanged and promised to keep monitoring inflation and ensuring the overall health of the economy.

This marks the third consecutive time that the Monetary Policy Committee (MPC) of the central bank has maintained the primary interest rates at 9.5%.

This strategic decision follows a series of adjustments, including an increase from the historically low 6.5% in April 2022 to 10% in October of the same year, aiming to stimulate economic activities. This new development means that the bank's lending rates for loans and mortgages will remain at more than 20% per annum.

BoU said in a statement that the latest MPC considers the current monetary policy stance as able to contribute to keeping inflation around its medium-term target; supporting economic stability to encourage saving, investment, economic growth, competitiveness, and socioeconomic transformation.

BoU also said the near-term prospects for the economy broadly remain unchanged. The recent quarterly GDP estimates by the Uganda Bureau of Statistics (UBoS) indicate that quarter-on-quarter real GDP growth for the second quarter of 2023 stood at 5.2%, a much faster growth compared to 0.4% in the first quarter. The faster growth was due to a strong recovery in the services and industry sectors.

''Economic growth is projected to remain strong in the coming months due to continued recovery in services and industry sectors,'' said Deputy Governor, Michael Atingi-Ego.

''Economic activity will be boosted by investment in the extractive industries financed by foreign direct investment (FDI) and higher export earnings.''

He said economic growth is projected at around 6% in the Financial Year 2023/24 and in the range of 6% to 7% in the medium term.

However, this outlook is subject to a range of uncertainties, including slower global growth posing a risk to domestic growth, a resurgence of supply chain distortions due to geopolitical factors, and tighter fiscal policy in part due to unfavorable global financial markets that could restrict government development expenditure.

Other factors include a stronger moderation of household expenditure in part due to tight monetary policy conditions globally and a reduction in agricultural output due to bad weather.

Since the last Monetary Policy Committee in October, new data has shown that amidst a surge in fuel prices, inflation has continued to gradually slow down. Annual headline and core inflation dropped to 2.7% and 2.4% in September 2023 from 3.5% and 3.3% in August 2023, respectively.

However, it remains unclear on whether it will continue to come down faster to the range of 3% to 4% in the fourth quarter of 2024 and back within the 4% to 5% range in 2025 as per the central bank's projection.

Latest statistics indicate that prices of food crops and related items in the concluding month of November 2023 decreased by 0.3%, according to the Uganda Bureau of Statistics (UBOS). This is a significant drop from the over 2% recorded the previous month. The statistics agency attributes this decline to a bumper harvest of vegetables, matooke, and others, which contributed to a 0.2% slowdown in prices during the month. Additionally, prices of fruits and nuts also saw a decrease.

But Atingi-Ego said projections are subject to risks. On the downside, he said global inflation could fall at a faster pace, potentially affecting domestic inflation.

''In addition, we could get a bumper harvest, which would push down food prices further leading to lower inflation,'' he said.

He added: On the upside, foreign exchange rate depreciation due to volatility in international financial markets, and escalation of the ongoing geopolitical conflicts could lead to further energy supply cuts and higher domestic fuel prices.''

Moreover, he said, prolonged higher inflation in advanced economies could lead to higher interest rates, triggering further capital outflows and spilling into further exchange rate depreciation. As a result, he said, MPC assesses the risks to be balanced in the short term but tilted upwards in the medium term.

-Independent (Kampala).

East Africa: Over 300 Kenyan MSMEs Showcase Products at EAC Trade Fair

Nairobi — Over 300 MSMEs from all 47 counties are representing Kenya during the ongoing 23rd Edition of the East African Community (EAC) Micro, Small, and Medium Enterprises (MSMEs) Trade Fair, formerly known as the Jua Kali/Nguvu Kazi Exhibition, at Cercle Hyppique grounds in Bujumbura, Burundi.

The theme for this year is 'Connecting East Africa MSMEs to Enhance Intra-EAC Trade' and has drawn over 1,500 MSMEs in trade, manufacturing, agribusiness, and services sectors from the seven EAC partner states.

The EAC Trade Fair was officially opened by the Vice President of Burundi, Prosper Bazombanza, on December 8, 2023.

In his remarks, the Vice President noted that the trade fair has been a vital platform for enhancing and revamping the socioeconomic integration of the people of East Africa.

It also provides a platform and opportunities for MSMEs to showcase their products, facilitate business-to-business engagements, and share information on trade-related matters.

The opening ceremony also doubled up as the launch of the EAC Non-Tariff Barriers (NTBs) App that was developed by the EAC Secretariat and Trade Mark East Africa with the aim of easing the reporting, monitoring, and elimination of NTBs in the EAC community.

The app will also provide different access levels for traders and NTB focal points in each partner state.

Kenya celebrated its country day with a showcase of its unique products and innovations, patriotic songs, fashion showcasing creative designs, apparel, artifacts, and dances from all the cultures represented.

''This trade fair will not only avail a forum for showcasing what Kenya has to offer to the regional market but also play a leading role in facilitating trade and business exchanges among participating countries while at the same time offering an exciting platform for launching new and improved technologies targeting both the local and regional markets,'' said Cabinet Secretary at the Ministry of Cooperatives and MSME Development Simon Chelugui.

''Burundi is a virgin market with immense unexploited opportunities and i encourage Kenyan MSMEs to take advantage of the excellent relations between the two countries to establish a foothold and exploit the emerging opportunities in terms of trade and investment,'' he added.

''Possible areas of investment include the following: Agro-processing; Education that will improve the gap in language barrier; Infrastructure to assist the present transport and logistical challenges; Finance and banking to enhance a common currency; Energy /fuel solutions; Light Manufacturing, telecommunication and the construction industry which aligns with the governments Agenda.''

The CS noted that statistics show EAC members are trading more with countries outside the bloc than partner states, becoming importers of products and services that ideally should be sourced in the region.

He further called on the partner states to consider integrating language, currency, transport, infrastructure, and mobile networks to better link regional growth and sustainable development.

''The Government is keen on leveraging on Kenya's international engagements to create opportunities for its citizens, businesses and investors,'' Principal Secretary State Department for MSMEs Susan Mang'eni.

''It is high time that the EAC MSMEs Trade fair organizing committee widened the scope to include the investor angle that will bring together different investors to support MSMEs scale up to become big manufacturers, said PS.

She also stressed one-language integration for easier trading and economic growth.

Present during Kenya Day celebrations were Minister of Commerce, Transport, Industry, and Tourism in Burundi, Marie Chantal Nijimbere; Deputy Secretary General of the East African Community, Susan Mange'ni; and Ambassador of Kenya to Burundi, Daniel Wambura CBS, among others.

-Capital FM.

Nigeria: Adjustment in Customs Exchange Rate Will Hurt Businesses - CPPE

This is not a good time for the CBN to increase the exchange rate for the computation of import duty and the clearing of cargo by importers, CPPE said.

The Centre for the Promotion of Private Enterprise (CPPE) on Sunday said the recent decision by the Central Bank to increase the customs exchange rate from N783 to N952/$ would worsen the already prohibitive production and operating costs for businesses in the country.

In a statement signed by Muda Yusuf, director of CPPE, the think tank said the decision would also inflict more pain on the citizens, erode profit margins, reduce purchasing power and put the survival of businesses at an elevated risk.

Mr Yusuf said the frequent changes in rates are also creating serious issues of uncertainty for investors and making the international trade process increasingly unpredictable.

He said businesses are already contending with an incredibly difficult operating environment arising from severe macroeconomic headwinds.

He explained that the persistent currency depreciation is making access to intermediate products very difficult for manufacturers, energy cost remains very high, purchasing power is weak, investors confidence is declining and consumer confidence is on the downward trend.

''This is not a good time for the CBN to increase the exchange rate for the computation of import duty and the clearing of cargo by importers. This review will impact the cost of all imports, including raw materials for manufacturers, pharmaceutical products, pieces of machinery, energy products, petroleum products and many more.

''This will make a bad situation worse for investors in the economy. It will worsen the misery of the citizens amid an excruciating inflationary condition,'' he added.

The CPPE appealed to the CBN and the Coordinating Minister of the Economy to review the increase, adding that trade policy measures should not be subjected to the full vagaries of the philosophy of market forces.

''The CBN should allow for a concessionary rate for the computation of import duty to protect the economy and the citizens from the reality of unbearable inflationary pressures.

''We propose that going forward, CBN should fix the customs duty rate at 20 per cent less than the official exchange rate in the light of the prevailing harsh economic conditions,'' the statement said.

-Premium Times.

Nigeria: No Plan to Increase Tax - Minister

The Minister of Finance, Wale Edun, said the government is aiming to reduce tax rates when necessary in order to create incentives for private sector investments.

The Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, says the federal government has no plan to increase the current tax rates.

Mr Edun stated this on Monday when he appeared before the House of Representatives Committee on Appropriations to defend the 2024 budget proposal.

The minister, while responding to questions from the lawmakers on the prospect of increased tax rate, said the government is not considering tax increments, but rather seeking to increase the tax bracket and capture more people and entities.

He said the government is even aiming to reduce tax rates when necessary in order to create incentives for private sector investments.

Mr Edun explained that with efficiency in collection, the government will increase the percentage of taxation to GDP to 18 per cent.

''There is no plan for an increase in the tax rate as such. The plan is to increase the revenue from taxation. The plan is to increase taxation returns as a percentage of tax to GDP from around nine per cent as it is now to 18 per cent in three years. This is closer to the African average.

''So, the emphasis is on collection not on increasing the rate. The emphasis is on collection efficiency, particularly collection. For a government that is dependent on private investments, foreign direct investment and domestic investment. The intention is to reduce taxes, not to increase it and to increase the money into creation of employment,'' he said.

Mr Edun insisted that the focus of the government is to ensure that government revenue is increased accordingly.

''The emphasis is on raising revenue. Government spending as a percentage of GDP is very low. When you compare it to the developed world where they spend over 50 per cent, like the Scandinavian countries, even in Africa, it is too low. Which means the government is not spending enough on infrastructure and social services,'' he said.

The minister also lamented the impact of tax waivers and incentives on the revenue of the country, stating that about one per cent of the GDP is given out as tax waivers.

''About one per cent of the GDP of this country is given out as tax incentive, import duty waivers and others,'' Mr Edun said.

He said the government is reviewing the entire structure of the tax system.

-Premium Times.

Google loses monopoly case to Fortnite maker Epic Games

A jury in the United States has found Google guilty of operating an illegal monopoly.

Epic Games, which owns popular video game Fortnite, sued Google in 2020, accusing it of unlawfully making its app store dominant over rivals.

Hundreds of millions of people use the store to install apps for smartphones powered by Google's Android software.

The ruling is a setback for the company on a platform that is a central pillar of its technology empire.

Google said it would challenge the outcome.

"Android and Google Play provide more choice and openness than any other major mobile platform," Wilson White, vice-president of government affairs and public policy at Google, said.

"The trial made clear that we compete fiercely with Apple and its App Store, as well as app stores on Android devices and gaming consoles," he added.

"We will continue to defend the Android business model and remain deeply committed to our users, partners, and the broader Android ecosystem."

Epic Chief Executive Tim Sweeney said that work on remedies would start in January.

"Victory over Google! After four weeks of detailed court testimony, the California jury found against the Google Play monopoly on all counts," Epic Chief Executive Tim Sweeney wrote in a post on X, formerly known as Twitter.

The lawyers for the two companies made their final arguments on Monday in the trial that lasted more than a month.

Jurors found in favour of Epic on all counts unanimously, according to a court filing.

The case also challenged transaction fees of up to 30% that Google imposes on Android app developers, and how the tech giant ties together its Play Store and billing service, which means developers must use both to have their apps in the store.

The ruling therefore could give developers more agency over how their apps are distributed and how they make money from them.

Google maintains that its commissions are competitive for the industry, and that it provides added bonuses like reach, transaction security and protections against malware.

But if the ruling stands, Google may have to allow more app stores onto Android-powered devices and will lose revenue it makes from any in-app purchases.

How big is Google's Play Store?

Google Play Store is one of the world's largest app stores and competes directly with Apple's App Store.

Android powers roughly 70% of smartphones globally, and according to Epic games, more than 95% of Android apps are distributed through the Play Store.

The store is not as profitable for the tech giant as its profitable search business, but the platform gives Google access to billions of mobile phones and tablets.

Epic said in the lawsuit that Google "suppresses innovation and choice" through a "web of secretive, anti-competitive agreements".

"Over the course of the trial we saw evidence that Google was willing to pay billions of dollars to stifle alternative app stores by paying developers to abandon their own store efforts and direct distribution plans, and offering highly lucrative agreements with device manufacturers in exchange for excluding competing app stores," Epic games said in a statement after the verdict.

Google had countersued for damages against Epic for allegedly violating the company's developer agreement.

The tech giant has faced a number of anti-trust cases, settling similar claims from dating app Match before the Epic trial started.

Epic filed a similar antitrust case against Apple in 2020, but a US judge largely ruled in favour of Apple in 2021.

"The evidence presented in this case demonstrates the urgent need for legislation and regulations that address Apple and Google strangleholds over smartphones," Epic Games said in its statement.-bbc

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INVESTORS DIARY 2023

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