Major International Business Headlines Brief::: 11 July 2023

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Major International Business Headlines Brief::: 11 July 2023 

 


 

 


 <https://www.nedbank.co.zw/> 

 


 

 


 

ü  Africa: 'Greenfields' Investment in Africa is Up, but Much More Needed in Renewables

ü  South Africa: Family in South Africa Asks Mozambique Govt For Help To Bury Gas Leak Victims at Home

ü  Nigeria: Why More Nigerians Prefer Self-Employment

ü  Liberia - Itc Initiates Formation of Coffee Cooperatives in Liberia

ü  Kenya: Odinga Excites Commuters as He Boards Matatu to Work

ü  Rwanda on Course to Tackle Illicit Financial Flows

ü  Uganda: Oil Pipeline Project Impoverishes Thousands

ü  Kenya: High Court to Rule On Implementation of Finance Law

ü  Nigeria: Why Local Rice Price Continues to Rise - Millers, Farmers

ü  Uganda: Behind Uganda's Tax Treaty Clash With the Netherlands

ü  Nigeria: Naira Unification - Forex Inflow Rises By 28% to U.S.$1.41 Billion

ü  Foxconn: Apple supplier drops out of $20bn India factory plan

ü  Privacy activists slam EU-US pact on data sharing

ü  Threads: Meta sets out planned new features

ü  Air travel in Africa: Costly flights hold the continent back

ü  Prime: Top US senator calls for probe into KSI and Logan Paul energy drink

 


 

 


 <https://www.cloverleaf.co.zw/> 'Greenfields' Investment in Africa is Up, but Much More Needed in Renewables

Cape Town — Newly-released statistics from the United Nations agency responsible for promoting economic growth in developing countries show a substantial increase in investment in new projects in Africa in 2022. At the same time the agency is calling for action to help developing countries to transition to clean energy.

 

The UN Conference on Trade and Development (UNCTAD) said in its World Investment Report released on July 5 that the value of so-called “greenfield” projects in Africa in 2022 rose nearly four times over the figure for 2021, from U.S.$52 billion to a record $195 billion.

 

Alongside this, it also reported more sobering news on what are classified as foreign direct investment flows to Africa. UNCTAD announced a headline figure for foreign direct investment (FDI) of $45 billion, down 44% over the figure for 2021 – although the 2021 number was inflated by a single financial transaction involving “a large corporate reconfiguration” within a firm in South Africa in 2021. “Excluding this deal, the change in FDI flows to Africa in 2022 would have increased by seven per cent,” the agency reported.

 

 

Reporting in more detail on new, greenfields investment, UNCTAD said six of the world's top 15 new “megaprojects” – those valued at more than $10 billion – announced in 2022 were in Africa. The number of projects rose by 39% to 766.

 

While the highest number of new projects were announced in the information and communications sector, the biggest increases in value were in energy and gas supply investments, to $120 billion, construction, to $24 billion, and extractive industries, to $21 billion.

 

The report said much of the growth in renewables in recent years has occurred in economically developed nations. Globally, developing countries need to triple investments in renewable energy. In an appeal issued with the report, UNCTAD called for urgent support to help these countries attract significant investments in clean energy.

 

 

“Total funding needs for the energy transition in developing countries are much larger and include investment in power grids, transmission lines, storage and energy efficiency,” UNCTAD said.

 

The agency's Secretary-General, Rebecca Grynspan, said a significant increase in investment in sustainable energy systems in developing countries was crucial if the world is to reach its climate goals by 2030.

 

Reporting on foreign direct investment, the UNCTAD report revealed widespread divergences by region and country in 2022 compared to 2021.

 

In Southern Africa as a whole, FDI returned to its previous levels, discounting the anomalous 2021 deal. In South Africa it dropped to $9 billion, below the 2021 level but double the average of the last decade. In Zambia, after two years of negative values, FDI rose to $116 million.

 

In East Africa, Ethiopia remains the second largest recipient of foreign direct investment in the continent, but FDI decreased by 14% to $3.7 billion. In Uganda it grew by 39% to $1.5 billion, where investment was in extractive industries, and in Tanzania it grew by eight percent to $1.1 billion.

 

 

In West Africa, Nigeria saw a negative flow of $187 million as a result of equity divestments, while flows remained steady in Senegal at $2.6 billion and fell in Ghana by 39% to $1.5 billion. In Central Africa, investments in offshore oil and mining in the Democratic Republic of Congo kept FDI levels at $1.8 billion.

 

In North Africa, foreign direct investment more than doubled in Egypt to $11 billion as a result of cross-border merger and acquisition sales, while in Morocco it decreased by six percent to $2.1 billion.

 

However, over the past five years FDI inflows have risen in four of Africa's regional economic groupings.

 

They grew by 14% to $22 billion in the Common Market for Eastern and Southern Africa and  by nine percent to $3.8 billion in the East African Community, while they doubled to $5.2 billion in the West African Economic and Monetary Union and quadrupled to $10 billion in the Southern African Development Community.

 

Turning to who is investing in Africa, the UNCTAD report said Europeans are by far the largest holders of FDI stock on the continent, with Britain holding $60 billion, France holding $54 billion and the Netherlands $54 billion.

 

 

 

South Africa: Family in South Africa Asks Mozambique Govt For Help To Bury Gas Leak Victims at Home

Harare — A family from Mozambique who lost four members to a toxic gas leak is appealing for help to bring the remains back home to be buried, EWN reports.

 

The two children, a 34-year-old man, and a 60-year-old woman were among the 17 people killed by a gas cylinder leak at the Angelo Informal Settlement in Boksburg last week.

 

The family says they do not want to bury them in South Africa although they cannot transport the four corpses to Mozambique due to financial constraints.

 

Five women, three children, including a one-year-old, and nine men were all killed after a gas leak on July 5, 2023 in the Angelo informal settlement in Boksburg, Ekurhuleni, Scrolla Africa reports. It is reported that a group of illegal miners (known locally as zama zamas) attempted to cut open a gas canister containing hazardous nitrogen oxide.

 

Solly Nonyane, a traditional leader in the area, said the issue of illegal mining was well known to the authorities - and even the president - who are not acting on it.

 

 

 

Nigeria: Why More Nigerians Prefer Self-Employment

The number of small businesses in the formal and informal sectors of the Nigerian economy continues to increase due to the vital role that small businesses play as a driving force of any economy and the pillar of major developed economies worldwide. Despite Nigeria's reliance on oil and revenues derived from it, the country's economy is primarily supported by small businesses, including nano, kiosk, micro, and small businesses in particular.

 

A visible reference within this space includes the vulcanisers,corner shop owners, single retail marketers, repairers, painters, business centre operators, restaurants, market women, and men in the various open markets, among others. And the formal operations such as law firms, accounting firms, consulting, fintech, and real estate companies, and so on in the country.

 

The small business economic activities in Nigeria play an unrecognised but important role all across the country and can equally contribute largely to the growth of the non-oil sector, employment generation, and the creation of more sustainable entrepreneurship if well harnessed. For instance, the popular Computer Village in Ikeja, the Aba Ariaria Market in Abia State, Kano Kurmi Market in Kano State, and Onitsha Market in Anambra State all consist of clusters of mostly nano, micro, and small businesses with huge economic engagements, however without much involvement by the government.

 

 

As it stands and relying on the Nigeria Bureau of Statistics, NBS, report shows that the total number of enterprises in Nigeria was estimated at 41.5 million, spread out across the 36 states in the country. The breakdown further shows that microenterprises constitute a high 99.8% (41.4 million) of total SMEs. The country enjoys a high presence of small businesses and this form of business predominates any other form of business in the country. Why is that? The simple reason that comes to mind is largely due to the many advantages of being self-employed or having a small business.

 

 

>From a survey conducted amongst small business owners, independence is the key driver and this gives the advantage to entrepreneurs to be their own bosses and be self-reliant. This singular attribute makes the total financial gain (100%) be that of the entrepreneur or the business owner. Small business gives the operator total business control without any form of dilution from external investors, which is a form of prestige for the operators, according to the views gathered from the survey conducted.

 

Without a doubt, this form of business is easy to set up and enjoys low or no serious regulatory requirements, unlike large enterprises. In fact, it is usually made up of one to three people, with even less than N50,000 initial capital outlay to operate. This form of business structure in most cases provides direct services. What do I mean? Hairdressers, fashion designers, dry-cleaners, artisans, kiosk operators, and event planners to mention a few, provide services directly to customers, and with that, they enjoy quick patronage and easy payments.

 

 

The administration of small business services is not cumbersome; the problem of coordination and communication which is a major setback to the operations of large firms is therefore easily solved in small businesses. They conveniently give keen interest and personal attention to the particular requirements of their customers who in some cases are willing to pay something extra for the special and urgent services rendered.

 

Some customers are tied to these small businesses because of the existing long relationship and personal attention they enjoy in the business. Further to this is the decision-making and taking process, because most owners of the small businesses are the operators or managers; there is hardly any problem in the decision process.Unlike the large enterprise approval processes, decision processes and dealing with customers can take a lot of time but with small businesses, the structure is simple with less bureaucracy.

 

The vivid truth is those small businesses enjoy agility and flexibility because of the ease with which the businesses can transmute and transfer capital to other sectors or industries, just in case the business operators need to react quickly to opportunities. In short, small businesses can dramatically change their business model to align with new opportunities, which is the prime driver of innovation and creativity.

 

The survey also led to the conviction that focus is another important advantage of running a small business; the focus of the operators is relatively narrow, and this appears to be a good trait. While large enterprises have to search far and wide for opportunities, small businesses tend to know exactly where they have the most competitive advantage.

 

Therefore, with all these attributes a well-functioning small business sector would add more value to the economic fortunes of the country, sustain livelihoods, and reduce poverty by creating more job opportunities in the economy than any other sector. Furthermore, these attributes can also give small businesses a competitive edge over large corporate entities and can help shape their success.

 

In conclusion, government should get more involved in the growth, development, and sustainability of small businesses within the country to reduce the high ca case of mortality and non-performance. The Nigerian government needs to realise and recognise that small businesses are crucial to job creation, economic diversification, innovation, poverty reduction, wealth creation, and income redistribution in their policy-making activities. If this sector is well harnessed in Nigeria it can be a huge catalyst in transforming the country economically and reduce the high number of unemployed graduates.

 

On a final note, small businesses can be a great tool to reduce the increasing unemployment rate in the country.

 

Dr Olubiyi is an entrepreneurship and business management expert

 

-Vanguard.

 

 

 

 

Liberia - Itc Initiates Formation of Coffee Cooperatives in Liberia

The International Trade Centre (ITC), in collaboration with the Farmers Union Network of Liberia (FUNL), started a week-long training program on the importance of cooperatives for coffee producers. The goal is to assist them in the process of creating coffee cooperatives in Liberia to boost revenues.

 

The training started on July 4, 2023, in Gbarnga, Bong County, and it is expected to extend to Lofa and Nimba counties in the next few days. The training is being organized by ITC and FUNL under the ITC/ACP EU funded Business Friendly Coffee Project of Liberia.

 

Before the Liberian civil war, the country was a major producer and exporter of cocoa and coffee products. But since the end of the war, the coffee sector in particular has been dormant. With support from the EU, the project is working to reactivate the coffee sector to improve the livelihood of producers.

 

The project has trained farmers on harvest and post-harvest losses, stumping and pruning of old coffee farms, the propagation of Robusta and Liberica coffee, and facilitated regional visits to coffee producing countries.

 

 

Speaking at the start of the workshop, the coffee expert from Burundi, Ephrem Sabatigita, said "Liberia has a very great potential for coffee production, but to make coffee more marketable, we need to transition the farming associations into cooperatives".

 

He also stated that he was in Liberia to assess the coffee production environment and to ensure that farmers are educated on how they can develop their coffee farming businesses.

 

The Program and Project Director at the Cooperative Development Agency (CDA), Harris B. Wennie, said that his institution is working with the ITC and FUNL to ensure that coffee farmers Associations are transformed into cooperatives. "We appreciate the capacity building for farmers, especially the process of educating the farmers on the need to transition into cooperatives. This is the only way that coffee farmers can get more money from their labor," he said.

 

"The coffee market is volatile. Many of the farmers sell their coffee to neighbouring countries [and get] very little profit. We now have many of our coffee farmers who have inherited farms from their parents and have returned to active coffee farming," he added.

 

ITC and FUNL are working in collaboration with the CDA and the Ministry of Agriculture to establish three coffee cooperatives in Bong, Nimba, and Lofa counties.

 

-Observer.

 

 

 

Kenya: Odinga Excites Commuters as He Boards Matatu to Work

Nairobi — Azimio leader Raila Odinga on Monday excited commuters when he boarded a Public Service Vehicle (PSV).

 

With music blaring, Odinga couldn't hide his delight as he settled into his seat on the matatu that plies the Ngong-Nairobi route, patiently waiting for other passengers to join him on the journey.

 

"Embracing the convenience and camaraderie of public transport heading to work this morning," Odinga shared on his social media account Monday.

 

Once the matatu was filled to capacity, the trip from Ngong to Nairobi CBD began.

 

Some passengers seized the opportunity to snap a selfie with the Opposition Chief, who attentively listened to their concerns.

 

Some voiced their frustrations over the escalating cost of food and the high price of fuel.

 

"Baba Tunaumia, hii matatu tulikua tunalipa Mia Moja leo tunalipa 150( Baba(Raila) we are struggling, we used to pay Sh100 for fare now we have to part with Sh 150," a passenger said as he jokingly pleaded with the Opposition Chief to cover his fare expenses.

 

 

Others complained of high electricity charges and water charges and pleaded with Odinga to intervene on their behalf.

 

When asked by a passenger about his experience in the matatu, Odinga said he was "enjoying the ride."

 

On June 27 Odinga asked Kenyans to come with different strategies such as carpooling and walking to work in protest in a bid to boycott from government's 'punitive' tax measures which saw increased fuel prices.

 

"Let us deny Ruto the fuel tax by limiting consumption of petrol and diesel. One way to do this is to carpool," Odinga said on June 27.

 

"Let us organize ourselves to carry out regular travels in a single vehicle whenever possible, offer each other a ride, cut down on non-essential travel and walk instead of driving whenever possible." said.

 

-Capital FM.

 

 

 

Rwanda on Course to Tackle Illicit Financial Flows

African countries have reported Ꞓ1.69 billion in additional revenues from fighting against tax evasion and illicit financial flows since 2009, a new report by Africa Initiative has revealed.

 

Illicit financial flow refers to the movement of money across borders that is illegal in its source. Examples include illegal movements of money or capital from one country to another while the income is from illegal activities such as tax evasion, drug sales, dirty money transfers, and money transfers to finance terrorism activities among other forms.

 

Given the size of illicit financial flows from African countries, the Africa initiative aims to unlock the potential of tax transparency and exchange of information for Africa by ensuring that African countries are equipped to exploit the improvements in global transparency to better tackle tax evasion.

 

Tax Transparency in Africa 2023: Africa Initiative Progress Report (TTiA) includes information provided by 38 African countries. Rwanda is among the 38 countries which include Algeria, Angola, Benin, Botswana, Burkina Faso, Cabo Verde, Cameroon, Chad, Congo (Rep. of the), Côte d'Ivoire, Djibouti, Egypt, Eswatini, Gabon, Ghana, Guinea, Kenya, Lesotho, Liberia, Madagascar, Mali, Mauritania, Mauritius, Morocco, Namibia, Niger, Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, South Africa, Tanzania, Togo, Tunisia, Uganda and Zimbabwe.

 

 

Members of the Africa Initiative identified assistance in the cross-border recovery of tax claims, as a collection of tax claims was a challenge for many tax administrations, including those in Africa.

 

The report was presented during the 13th Meeting of the Africa Initiative in Cape Town on July 7. The additional revenues from tackling tax evasion and illicit financial flows, through offshore tax investigations, were generated thanks to raising political awareness and commitment in Africa and developing capacities in African countries in tax transparency and exchange of information.

 

 

"While this report demonstrates African countries' progress in using tax transparency and exchange of information, it remains uneven. A significant number of African countries are not yet effectively using available EOI infrastructures to enhance their efforts for domestic resource mobilization," reads part of the report.

 

The report adds that this calls for new strategies by African tax authorities to establish a culture of exchange of information and ensure that it becomes a tool to promote tax compliance.

 

"These strategies should include continued capacity-building and awareness-raising activities targeting tax auditors/investigators on the usage of exchange of information as a tool to complement domestic information," it recommended.

 

In 2022, Tunisia committed to starting automatic exchanges of financial accounts information (AEOI) by 2024, joining four other African countries (Kenya, Morocco, Rwanda, and Uganda) that are committed to undertake their first automatic exchanges by a specific date, and five other countries already exchanging on a reciprocal basis (Ghana, Mauritius, Nigeria, Seychelles, and South Africa)

 

In 2022, Angola was invited to sign the Convention on Mutual Administrative Assistance in Tax Matters.

 

Madagascar signed the Convention, and Burkina Faso, Mauritania, and Rwanda deposited their instruments of ratification.

 

Implementation of the automatic exchange of financial account information in Rwanda is expected in 2025, the report says.

 

Overall, it is expected that 10 African members will be exchanging information automatically by 2025.

 

Tax evasion is the most prevalent financial crime in Rwanda, in terms of money lost, according to five-year statistics by 2021, indicating that over Rwf20bn was lost to the vice during this period.

 

Illicit financial flows in Africa are estimated between $50 billion and $80 billion annually as 44 per cent of Africa's financial wealth is thought to be held offshore, which corresponds to tax revenue losses of Ꞓ17 billion.

 

-New Times.

 

 

 

Uganda: Oil Pipeline Project Impoverishes Thousands

Land, Livelihoods Lost for Fossil Fuel Project Disastrous for Climate

 

The French fossil-fuel giant TotalEnergies’ planned oil pipeline in East Africa has devastated thousands of people’s livelihoods in Uganda and will contribute to the global climate crisis.

The project will displace more than 100,000 people, has caused food insecurity and household debt, caused children to leave school, and is likely to have devastating environmental effects.

People should be compensated in line with the IFC Performance Standards, other companies should not support the pipeline, and the project should not be completed.

The French fossil-fuel giant TotalEnergies’ planned oil pipeline in East Africa has devastated thousands of people’s livelihoods in Uganda and will exacerbate the global climate crisis, Human Rights Watch said in a report released today. If completed, the East African Crude Oil Pipeline (EACOP) project will have dozens of well pads, hundreds of kilometers of roads, camps and other infrastructure, and a 1,443-kilometer pipeline connecting oilfields in western Uganda with the port of Tanga in eastern Tanzania.

 

 

The 47-page report, “Our Trust is Broken”: Loss of Land and Livelihoods for Oil Development in Uganda, documents the land acquisition process for one of the largest fossil fuel infrastructure projects under construction anywhere in the world. The development in the oilfield, which will ultimately displace over 100,000 people, is well underway. Although 90 percent of people who will lose land to the project have received compensation from TotalEnergies EP Uganda, the project has suffered from multiyear delays in paying compensation and inadequate compensation.

 

“EACOP has been a disaster for the tens of thousands who have lost the land that provided food for their families and an income to send their children to school, and who received too little compensation from TotalEnergies,” said Felix Horne, senior environment researcher at Human Rights Watch. “EACOP is also a disaster for the planet and the project should not be completed.”

 

 

The report is based primarily on over 90 interviews that Human Rights Watch conducted in early 2023, including with 75 displaced families in 5 districts of Uganda.

 

Human Rights Watch found that the impact of multiyear delays has been compounded by unclear communications as to whether farmers can continue to use the land to harvest coffee, bananas, and other cash crops in the interim. Consequently, the land acquisition project has caused severe financial hardships for thousands of Ugandan farmers, including heavy household debt, food insecurity, and an inability to pay school fees, causing many children to drop out of school.

 

Farmers said they felt pressured to sign compensation agreements in English, a language many of them cannot read, and many described being offered cash instead of the option of replacement land in line with international standards. Unkept promises about grave relocation and an improvement in the quality of life that was promised in the many early meetings extoling the virtues of EACOP have eroded trust between communities and TotalEnergies.

 

 

“They come here promising us everything,” a resident said. “We believed them. Now we are landless, the compensation money is gone, what fields we have left are flooded, and dust fills the air.”

 

TotalEnergies is the principal company involved through its Ugandan subsidiary TotalEnergies EP Uganda, alongside the China National Offshore Oil Company and the state-owned oil companies of Uganda and Tanzania. Atacama Consulting and Newplan Group managed the land acquisition process on behalf of TotalEnergies EP Uganda.

 

TotalEnergies has promised to respect various international standards including International Finance Corporation (IFC) Performance Standards, which require TotalEnergies and its subsidiaries to restore or enhance livelihoods to pre-disturbance levels. The pipeline has secured about 60 percent of its funding target. While the project still searches for the necessary financing, TotalEnergies and its subsidiaries should increase the amount of compensation and livelihood restoration efforts to be consistent with human rights standards.

 

In a June 15 letter to Human Rights Watch, TotalEnergies stated they “continue to pay close attention to respecting the rights of the communities concerned” and provided detailed responses  underscoring their view that compensation offered was in accordance with IFC standards. Atacama Consulting, the environmental consulting firm facilitating land acquisition for TotalEnergies EP Uganda in the Tilenga oilfields, responded on June 22. They rejected allegations that pressure was applied to people to sign and outlined why in their view that compensation provided met the requirement of “full replacement cost.”

 

Studies show that the construction and operation of EACOP poses grave environmental risks. The pipeline route traverses sensitive ecosystems, including protected areas and internationally significant wetlands, posing threats to biodiversity and ecosystems that local communities depend on for their sustenance.

 

EACOP is being developed at a time when the Intergovernmental Panel on Climate Change (IPCC), the world’s leading authority on climate science; the International Energy Agency; and others warn that no new fossil fuel projects can be built if the world is to reach Paris Agreement goals and limit the worst impacts of climate change. In March, the IPCC confirmed that global temperatures are increasing at record levels, and urged governments to cut emissions by phasing out fossil fuels and scaling up renewable energy.

 

Because of the opposition to EACOP from civil society organizations and climate activists in Uganda and around the world, many financial institutions and insurance companies have made a public commitment to not support the pipeline. Financial institutions should avoid supporting EACOP due to the devastating impacts of fossil fuels on climate change as well as future risks of serious human rights impacts, Human Rights Watch said.

 

“The burning of fossil fuels is driving the climate crisis,” Horne said. “Financial institutions considering funding EACOP should steer clear of this project and instead help Uganda embrace its significant clean energy potential.”

 

 

 

 

Kenya: High Court to Rule On Implementation of Finance Law

Nairobi — The High Court is on Monday expected to rule on the suspension of the newly signed Finance Act that is set to double fuel tax and introduce new taxes.

 

Justice Mugure Thande extended interim orders halting the government from collecting taxes outlined in the Finance Act, 2023 until she delivers a substantive ruling.

 

Busia Senator Okiya Omtata who is behind the petition said the law is unconstitutional adding that its implementation would subject Kenyas to great suffering.

 

The High Court suspended the Finance Act 2023 on June 30, a day after it was scheduled to come into force amid uproar over tax proposals including the doubling of Value Added Tax (VAT) on fuel.

 

 

Justice Thande then directed the State to file a response by Tuesday, July 4.

 

The orders effectively stopped the government from levying any taxes under the new Act, including the 8 per cent VAT increment on fuel set to take effect Saturday.

 

The Energy and Petroleum Regulatory Authority (EPRA) however proceeded to effect an eight per cent increment in prices of petrol, diesel and kerosene, adjusting the VAT rate from 8 per cent to 16 per cent.

 

President William Ruto's government pushed the law through parliament despite stiff opposition, saying extra revenue measures were needed to help deal with growing debt repayments, and fund job-creating initiatives.

 

Doubling the fuel tax to 16 percent and the introduction a 1.5 percent housing levy for all employees is among a raft of taxation measures contained in the Finance Act 2023.

 

-Capital FM.

 

 

 

Nigeria: Why Local Rice Price Continues to Rise - Millers, Farmers

Stakeholders in the rice value chain have identified insufficient paddy rice and poor irrigation that are hindering all-year-round farming as the major factors responsible for the high cost of local rice in the country.

 

They also listed the near absence of mechanisation, insecurity and the high cost of inputs as some of the causes.

 

Daily Trust reports that despite huge investments in the rice value chain, the price of locally processed rice has continued to rise since 2018 in the country.

 

The goal in massive investment by the federal government was to help the nation to become self-sufficient, and ensure long-term food security, which is essential for maintaining national security.

 

 

To achieve the national food security goal, former President Muhammadu Buhari launched the country's comprehensive domestic rice production initiative under the Anchor Borrowers' Programme on November 17, few months after taking over in 2015.

 

To further support and strengthen the domestic rice sector, Buhari closed the country's borders in 2019 to curb smuggling activities that flooded the country with foreign rice. This action considerably increased domestic production from 2.1 million tons in 2015 to roughly 5.2 million tons by 2022.

 

But despite these efforts, the cost of local rice is rising daily, pushing it even out of reach of many Nigerians, who are left to wonder why.

 

A 50kg bag of locally milled rice is now sold at between N37,000 and N42,000 depending on the brand and the location, contrary to when it was sold for N20,000 to N23,000 a few years back.

 

 

This continued rise in price has made a cross-section of Nigerians to appeal to President Bola Ahmed Tinubu to do everything possible to bring down the price of the stable commodity.

 

Azeez Ramat Kikelomo, a civil servant, said with a bag of local rice now being sold at over N40,000, it would be difficult for many households to continue to afford the commodity.

 

"If I remove N40,000 from my salary to buy rice alone, what will remain? It is not feasible. The president should please wade in immediately," she pleaded.

 

Why government's interventions fail to reduce price

 

Although, several stakeholders praised and applauded the effort of the government so far, they however criticise how individuals in charge of carrying out the programme handled it.

 

 

Ilyas Nazifi, a key player in the rice value chain and CEO of Prime Integrated Mills, Idu Industrial Area, Abuja, said farmers' associations registered just anyone interested in the programme without verifying them as true farmers.

 

He said, "All the checks and balances that were needed to checkmate foul play, such as farm GPS coordinates, were bypassed. Through such abuse of process, hundreds of billions meant for real development were siphoned by a few well-placed individuals

 

"Nigeria's agriculture system is largely subsistence, meaning smallholder farmers still using traditional hoes and cutlasses are the ones feeding the country. There are no large-scale commercial farms that can produce enough through mechanised farming systems to sustain our industrial demands," he said.

 

Nazifi said all nations with lower production costs than Nigeria's have larger commercial farms in addition to smaller family farms to ensure sufficient supply of raw materials.

 

He also blamed successive governments for not investing in dams, rural roads and other transport infrastructure to aid farming.

 

For instance, he noted that of the over 25 purposely built agricultural dams in Kano, only three are working while the rest have silted over time and are greatly unutilised.

 

Nazifi statistically painted the picture of the country's rice economy thus: "Nigeria's demand for milled rice stands at about 12 million metric tons per annum. Our combined milling capacity stands at around 8 million metric tons per annum while the total paddy produced is around 5 million tons per annum.

 

"Going by these approximate statistics, it shows that the milling capacity is almost 80% higher than the quantity of paddy produced. This pushes the rice mills into competition with themselves for the insufficient paddy to keep their operations running.

 

"If demand exceeds supply, prices go up unnaturally. This is the reason why a bag of 50kg of rice in Nigeria costs twice as much as anywhere else in the world. As at the last time it was checked, a 50kg bag of rice in India costs less than N20,000.

 

"With the above statistics, the country still has a gap of about 4 million tons annually which is filled up by foreign rice imports either legally or through illegal smuggling routes."

 

He lamented that smugglers had been encouraged to prosper under all conditions by the government's incapacity to protect borders and the incentive of the price difference in rice.

 

"The risk of smuggling deters significant investment in the rice business," he added.

 

Besides, he said, insecurity has prevented a significant increase in farming in the rural regions and decreased the total number of acres under cultivation, adding, "Nearly every day, farmers are kidnapped and murdered."

 

 

The President of the All Farmers Association of Nigeria (AFAN), Ibrahim Kabiru, said the high price of inputs, such as seed, fertilisers and other chemical inputs such as herbicides, labour and transportation costs for moving paddy from the farm to the processing mills, have been some of the major challenges responsible for price spike.

 

He added that the energy cost of processing rice, packaging, marketing and sales are all contributing factors to spiking prices.

 

"The above costs must be transferred to the consumer so the milled rice will certainly cost more. The price of the milled cannot come down as long as these enumerated costs remain high.

 

"The massive investment from the government through the CBN Anchor Borrower Programme has not been managed properly to really upscale the productivity of the small holder farmers which will effectively enhance availability in the face of high demand.

 

"High demand and lack of availability will give rise to inflation and that's why we are in this situation," he said.

 

According to a Kano-based agricultural economist, Mr Ishaya Bantu, it is clear that the foreign rice in Nigerian markets is smuggled rice, adding that the smuggling of rice has become necessary because the indigenous rice milling company couldn't produce the required rice despite high demand.

 

He also explained that the Nigerian rice industry is only milling what it can get from the local farmers and the rice farmers have been producing less than 60% of the required rice paddy hence the increase in foreign rice smuggling to augment the growing demand.

 

Way forward

 

To get prices to come down, Kabiru, an architect, said there was the need to improve productivity by embracing mechanization, subsidized input cost and transportation, reduced energy costs for processing, and enhanced distribution, controlled consumption and firming up of the naira.

 

Nazifi, an engineer, on his part, however, said the government should make security a priority so that farmers will return to their farms and continue producing for the nation.

 

"Serious intervention in infrastructure is needed to allow for cost-effective production. Investments in dams and irrigation facilities are necessary to cut production costs and ensure the availability of raw materials for rice mills.

 

"Farm inputs such as fertilisers, pesticides and other agro chemicals are constantly increasing in price owing to the instability in our foreign exchange. Government should encourage investment in manufacturing such chemicals onshore to mitigate price fluctuations

 

"Commercial agriculture is the way forward through any sort of arrangement. Private-public, joint ventures or any other methods must be encouraged to boost investment in commercial agriculture. State governments should be prevailed upon to provide adequate lands for such purposes," he said.

 

Bantu, in his view, said the government should concentrate on an internal rice production development approach that would ensure the effective adoption of mechanized agriculture and the opening of more rice production sites with 100% government involvement that will encourage and boost rice production to cover the already identified gap that will subsequently lead to the stoppage of paddy importation.

 

Alhaji Dauda Abdullahi, a rice farmer in Kano, called for the provision of an adequate mechanism that will locally sustain rice farmers' activities along the value chain.

 

Stakeholders advocate a transitional movement that will encourage mechanized agricultural practices and expansion of local rice production with adequate and effective government intervention in terms of policies among other things that will boost local production and stoppage of importation.

 

FG to pay attention to inputs, irrigation, mechanization

 

The Federal Ministry of Agriculture and Rural Development has promised to pay more attention to input availability, mechanization and expanding irrigation facilities to boost production.

 

A director in the ministry, who spoke on condition of anonymity, admitted that there is much to do in the area of mechanization, and access to input which, according to him, are the key factors that can guarantee massive harvest.

 

He however said most policies on rice are not domiciled in the ministry.

 

We supported 4.57m farmers - CBN

 

When contacted, CBN's director of corporate communications, Abdulmumin Isa, said the Anchor Borrower Programme (ABP) supported about 4.57 million smallholder farmers who cultivated over 6.02 million hectares of 21 commodities across the country.

 

He said the programme has helped to improve the national average yield per hectare of these commodities, with productivity per hectare almost doubling within the eight years of the programme's implementation.

 

He said, "Let me cite the statistics from the Food and Agriculture Organisation (FOA), the ABP also contributed significantly to the increased national output of commodities, with maize and rice peaking at 12.2 and 9.0 million metric tons in 2021 and 2022, respectively."

 

-Daily Trust.

 

 

 

Uganda: Behind Uganda's Tax Treaty Clash With the Netherlands

Kampala, Uganda — The Netherlands has been one of the top ten sources of foreign direct investments (FDI) for Uganda since the two countries signed the treaty in 2004.

 

Today, there are now about 200 companies with a tie to Uganda partly or wholly owned by Dutch people according to the last count done in 2020 by the Netherlands-African Business Council.

 

Many of these companies have invested in the horticulture sector, particularly high-value crops such as vanilla, tea, cocoa, coffee and sugar; dairy and piggery, as well as tourism, infrastructure, transport, ICT and marketing. Several Dutch companies have invested in Uganda in recent years with assistance of the Netherlands Enterprise Agency (RVO).

 

 

Between 2018 and 2019, FDI from Netherlands-registered companies was reported to be about Ꞓ1.6 billion, making Uganda one of the top foreign direct investment destinations for Dutch firms on the continent according to a report published in 2021 by the Policy and Operations Evaluation Department of the Dutch Ministry of Foreign Affairs.

 

Uganda's pleasant climate, relative safety and security and near-perfect location in the centre of Africa are some of the main reasons Dutch entrepreneurs often cite in choosing to invest here.

 

Wagagai Ltd, one of the world's largest flower-growing firms which has been growing and exporting begonias, chrysanthemums and poinsettias flowers and many other ornamental plants to the Netherlands and other European markets from its base on the northern shores of Lake Victoria in Wakiso District points at the "Copious sunlight, constant humidity and mild temperatures" for its choice of Uganda. The flower farm's proximity to Entebbe Airport, just 20 minutes away, is yet another factor.

 

 

It also helps that Uganda is right in the centre of the continent with neighbours such as DR Congo, South Sudan, and Kenya which are interested in buying products from Uganda, according to the Netherlands-Uganda Trade and Investment Platform (NUTIP), an association that brings together both Dutch and Ugandan entrepreneurs to promote common private sector investment interests.

 

Unilever-Uganda the home and personal care products company and KLM Royal Dutch Airlines were perhaps the only recognizable Dutch companies before the DTA about 20 years ago. Today, most Dutch investors who have invested in Uganda have done so in the country's agricultural sector, Major James Mutabaazi, the Tax Manager at Mazars, an international audit, accountancy, tax and legal advisory firm for Dutch clients with business operations in Uganda under NUTIP told The Independent in an interview at the firm's head office in Bugolobi, a Kampala suburb.

 

 

However, the Dutch Ministry of Foreign Affairs says in a report that the large number of Dutch companies in Uganda, include non-Dutch investors that routed their investment through so-called Special Purpose Enterprises (SPEs). This is the basis upon which critics of Uganda's Double Taxation Agreements (DTAs) with the Netherlands find it 'harmful' to Uganda's domestic revenue mobilization agenda.

 

DTAs are treaties between two states with the main aim of avoiding taxing business entities or even individuals twice. It applies to income, capital gains, dividends, interests, royalties, and technical fees.

 

Since its independence in 1962, Uganda has signed Double Taxation Agreements with close to a dozen countries including; Belgium, Denmark, India, Italy, Malawi, Mauritius, the Netherlands, Norway, South Africa, the UK and Zambia.

 

Grace Namugambe, the Programme Officer, Financing for Development at the Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) says countries often sign such treaties to avoid issues of unfair taxation where an entity can potentially be taxed twice.

 

"If someone or a company is to be taxed in one jurisdiction, you want them to be exempted in the next, otherwise, it is not only unfair but also distorts the efficiency of capital if it is going to be taxed twice," says Corti Paul Lakuma, a research fellow based at the Economic Policy Research Centre in Makerere University.

 

"Besides being an investment incentive, these agreements try to address an equity and efficiency concern in the taxation regime," Lakuma told The Independent. DTAs are also entered into to try to attract foreign investments and for strategic political reasons.

 

DTAs and tax revenue loss

 

Uganda first signed a Double Taxation Agreement (DTA) with the Netherlands in 2004. However, in 2018 the two countries began a process of reviewing it to among other reasons, block abuse by non-Dutch multi-national companies registered as Dutch companies to exploit treaty benefits. This practice has left Uganda losing out on the much-needed tax revenues. But, five years on, the re-negotiation of the agreement has not moved as speedily as Uganda probably expected.

 

Gerald Namoma, a senior economist in the tax policy department at the Ministry of Finance, Planning and Economic Development is part of the negotiating team that includes senior government officials from the Ministries of Finance, Foreign Affairs, Justice and Constitutional Affairs and the Uganda Revenue Authority (URA).

 

He recently told The Independent that when the Uganda-Netherlands DTA was originally signed, its objective was to strengthen the economic relations between the Netherlands and Uganda; remove tax obstacles, promote trade and investment, and transfer technology.

 

 

"DTAs create a stable framework which ordinarily would be lost with the frequent changes in the local tax legislation," he told The Independent. He said in case of tax payers under Dutch jurisdiction doing business in Uganda, the government can assist in collecting tax on behalf of the Dutch government and vice versa."

 

"The Netherlands has a big financial centre and people can hide their money there but when people know that the tax enforcement mechanisms can reach you wherever you are, then they are tempted to comply," he said.

 

Namoma told The Independent that Ugandan and Dutch negotiators have been engaging on the issue. The Dutch Ministry of Finance also confirmed to The Independent in an email on June 5 saying multiple talks have taken place between the two countries' negotiators since 2019.

 

"So far this has not yet resulted in a new tax treaty between the Netherlands and Uganda. While we cannot share the contents of or positions taken in specific treaty negotiations, the Dutch tax treaty policy provides some insight into the Dutch treaty policy (also in relation to developing countries)," the Dutch finance ministry said.

 

Outstanding issues

 

Namoma told The Independent that both governments have since agreed on most of the issues except five areas of concern. He says the Uganda government does not want the DTA to be used to avoid taxes accruing from the country's emerging petroleum sector. He says instead, the government agrees on specific fiscal regimes with the oil and gas investors.

 

The other sticky issue concerns Capital Gains Tax on the sale of assets. Namoma says under domestic law, the Uganda government usually has a right to tax the investor (when they are selling on their asset). However, this provision has been relaxed under the DTA framework.

 

For instance, in Uganda, the URA imposes a capital gains tax of 30% on sale of assets yet it is tax-exempt in the Netherlands. This clause, the tax experts argue, can be abused when companies structure their activities to ensure that the taxing rights are in the Netherlands which exempts capital gains tax. The definition of capital gains is also broad and it is not only limited to offices but includes places where companies sell items, and receive orders including warehouses.

 

The other issue is the threshold for taxation of business activities in Uganda in terms of time and nature of activity. Namoma explains that whereas the Dutch want very large thresholds, Uganda prefers a very low threshold to secure better taxing rights. Treatment of withholding tax; payment of dividends and royalties in the DTA are the other areas of concern for the government. "If these are going out untaxed, there is a problem," Namoma says.

 

Namoma told The Independent that the government also finds issue with the clause on technical services which are essential to most developing countries. He says the DTA, for instance, provides for taxation on activities which have run for more than four months within any given period of 12 months period but to avoid it, some companies ensure they run for less than four months.

 

"From our analytical work and engagement with different stakeholders, we were able to catch the red flags that the Dutch DTA was one of those that were being used mostly to avoid unfairly paying taxes that are due to Uganda," Namoma adds.

 

Other experts told The Independent that the stalemate between the two governments appears to occur because the Dutch government's fiscal treaty policy accommodates the positions of developing countries during tax treaty negotiations but does not expand the scope of the treaty to cover all their interests. They say the Dutch aim for better tax regime for their investors compared to other foreign (and local) investors in partner countries.

 

In an email to The Independent, the Dutch Ministry of Finance said the Dutch government aims to include anti-abuse-provisions in existing and new tax treaties. That is why, it says, the Netherlands has signed and ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS) which is a Multilateral Convention (MLC) that includes anti-abuse-provisions, including the tax treaty with Uganda.

 

"In short, if two states are a party to the MLC and there is a 'match', the anti-abuse-provisions from the MLC become effective in the existing treaty-relationship," it says.

 

The Netherlands has listed the tax treaty with Uganda as a 'covered agreement' under the MLC, however, Uganda is not a party to the MLC, the Dutch government says. It says when it approached Uganda to add anti-abuse-provisions to the tax treaty bilaterally, Uganda requested to also revise other parts of the treaty.

 

According to a ministerial statement dated Feb.21, 2023 addressed to the President of the House of Representatives in the Dutch Parliament, the Netherlands appears to be engaged in similar negotiations with at least 20 other countries.

 

In the statement, the Dutch Finance Ministry says the Netherlands has made a proposal for the conclusion of the negotiations and is now waiting to see whether Uganda can agree to this. "The Netherlands would like to add more anti-abuse measures to the treaty and the treaty policy also offers room in other areas to meet additional wishes of Uganda," the ministry says.

 

Low tax revenue base

 

Despite Uganda coming up with an ambitious domestic revenue mobilization strategy (2019/2020-2023/2024) to boost local revenue collection, its tax to GDP ratio stands at less than 14% -the lowest within the East African Community.

 

Harmful clauses in some DTAs like the one between the Netherlands and Uganda have been cited as some of the factors for the low tax-to-GDP ratio which in turn have led the government to depend on foreign debt to plug the budget deficit. At the moment, the country's public debts stand at Shs 86.6 trillion, representing 53% of the GDP which is beyond the debt ceiling as per the International Monetary Fund.

 

 

The surge in public debt beyond the ceiling point signals a likely rise in interest rates on new loans in future and an increase in loan service obligations, leaving the government with meagre resources to provide other basic services such as health and education to the population.

 

Grace Namugambe, the Programme Officer, Financing for Development at the Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) told The Independent that countries sign DTAs to encourage financial transparency but the treaties also have an ugly side to them.

 

In a recent report published by Oxfam, one of the vocal tax justice campaigners, Uganda loses more than Shs2 trillion (US$ 547 million) annually with most of this money being taken out by multinational companies through their aggressive tax avoidance mechanisms such as profit shifting, trade misinvoicing and double taxation treaties.

 

Other tax justice campaigners have also flagged the Uganda-Netherlands treaty because of its potential to be a treaty shopping route in the field of capital gains tax as it prevents the country from taxing the sale of shares in a Ugandan company by a Netherlands company.

 

This creates a window for a foreign investor to avoid paying capital gains tax on the sale of immovable property in Uganda by structuring the purchase through a vehicle in the Netherlands.

 

In fact, The DTA between Uganda-Netherlands, is responsible for the capital gains tax dispute involving URA and Zain Telecom the forerunner to Airtel, with over US$ 85 million (about Shs 314 billion) worth of revenues at stake.

 

URA vs Zain

 

The matter between URA's Commissioner General v Zain International BV remains under arbitration. According to court documents, Zain International BV disposed of its 100% shareholding in Zain Africa BV to Bharti Airtel International. Both companies are domiciled in The Netherlands. Zain Africa BV, the subject of the disposal, had 100% shareholding in Celtel Uganda Holdings BV which owned 99.99% of Celtel Uganda Ltd.

 

Celtel Uganda Ltd's s shares in Uganda were not transferred and its property, movable or immovable, was not disposed of. The transfer of the shares in Zain Africa BV took place in the Netherlands. The URA raised an assessment of capital gains tax against Zain International BV on the resultant gain realized from the disposal of shares.

 

However, Zain International BV objected to the assessment and stated that the transaction was only concerned with the transfer of shares of Zain Africa BV in the Netherlands, and no shares in Celtel Uganda were disposed of. The URA also objected arguing that the transaction under consideration is one of gain arising from the disposal of an interest in immovable property in Uganda. Almost a decade on, the issue remains under arbitration.

 

Experts say this case shows how Uganda could be losing a lot of revenue through transactions or indirect transfers of capital assets since it does not have any provision regarding the taxation of property in rich countries such as the Netherlands.

 

Mwajumah Nakku Mubiru, the Manager VAT and Income Tax Litigation in the Department of Legal Services and Board Affairs at the Uganda Revenue Authority told The Independent URA has about five related cases involving Dutch registered companies here.

 

"The Netherlands world over is perceived as a good jurisdiction for treaty shoppers. So, it has a reputation for being a pass-through jurisdiction where a number of non-Dutch companies to register there and do their aggressive tax planning," she told The Independent.

 

Trade promotion experts' views

 

Onesmus Mugyenyi, the Deputy Executive Director of the Advocates Coalition for Development and Environment (ACODE), a Kampala-based policy thinktank told The Independent that "treaty shopping" is the main reason why the DTA between Uganda and the Netherlands has attracted the most scrutiny by civil society.

 

"What's the intention of these companies registering their operations in The Netherlands? Is it because it is a Dutch company? Is it because it is doing business in The Netherlands or the whole intention of this registration is to make sure that it benefits from the provisions of the agreement that is otherwise intended to benefit bona fide Dutch companies or Dutch nationals?"

 

However, Emmanuel Ahurira, a tax expert at Mazars told The Independent that the perception from tax justice experts that DTAs are responsible for taking out a lot of revenue which would otherwise be taxed in-country is borne out of misconception. He says Uganda as a small economy needs foreign direct investments and has to offer incentives and attractive conditions.

 

Ahurira says he does not also think that tightening the DTA would substantially improve the URA's revenue collections arguing that the tax base is still relatively small. Corti Paul Lakuma, the research fellow, also says Uganda cannot run away from DTAs.

 

"Many corporations have chosen to domicile their corporations in these countries and if we want them to establish their businesses here for our local people to get jobs, for us to get knowledge and technology; that agglomeration effect has a positive economic effect," he says.

 

"There will always be winners and losers," Lakuma told The Independent. "The idea is to have policy tools in your system to compensate the loser. We can improve our tax base but my general study of corporate taxation is that this is a complex area especially because investors are a sensitive group of people who can change their mind and shift their decisions (if pressed)."

 

-Independent (Kampala).

 

 

 

Nigeria: Naira Unification - Forex Inflow Rises By 28% to U.S.$1.41 Billion

Following the harmonisation of the exchange rates in the country by the Central Bank of Nigeria (CBN), the total inflows into the Importers & Exporters (I&E) Window increased by about $270 million to close the month of June 2023 at $1.41billion.

 

This made it the second consecutive month of growth, rising by 23.8 per cent month-on-month to $1.41 billion in June as against $1.14 billion recorded in May.

 

President Bola Ahmed Tinubu had earlier in June 2023 announced the intention of his administration to harmonise the exchange rates in the country, leading to the collapse of the forex market by CBN.

 

 

Although, foreign investors are yet to come trooping into Nigeria following the floating of the naira, a move that is targeted at attracting foreign exchange inflows into the country, the latest data by the FMDQ shows an improvement in dollar inflow into the country.

 

Data obtained from the FMDQ shows that foreign inflows, which were up by 44.3 per cent month on month to $298.8 million, had in the month under review increased but remain underwhelming relative to pre-pandemic levels in 2019 when it recorded an average of $1.56 billion as foreign investors continue to be cautious about returning in their droves despite the foreign exchange market liberalisation.

 

On the other hand, local inflows rose further by 19.3 per cent month on month to $1.11 billion because of higher inflows from non-bank corporates which went up by 35.7 per cent to $597.10 million and exporters' inflow which was up 2.3 per cent to $448.00 million.

 

Analysts at Cordros Research believe that foreign investors will likely adopt a wait-and-see approach in the near term as they await the CBN's actions in clearing its foreign exchange backlogs and the direction of short-term interest rates amid high inflation.

 

 

The analysts, in an emailed note, said they "expect the lingering reforms in the foreign exchange market to translate to improvements in forex liquidity conditions over the medium term as market participants' confidence builds up.

 

On the revision of the computation methodologies of the NAFEX and I&E spot rates by the FMDQ, the analysts say the revision aligns with the global shift in benchmark administration to a transaction-based model and the ongoing reforms in the domestic forex market.

 

The latest revision which was announced last week effects a transition from the current contributions-based model, which involves the use of indicative quotes from market participants to a transactions-based model that will apply actual forex market transaction data effective 5 July 2023.

 

 

"On the one hand, we expect the computation changes to improve transparency in the computation of the spot forex rates and provide a clearer picture of the forex rates reflective of the market realities at different times, albeit with increased intra-day volatility. Similarly, the IOCs being permitted to sell their dollars to dealing members will likely increase forex liquidity in the IEW over the medium term, supporting the local currency," they stressed.

 

Meanwhile, the first trading week in July 2023 began in the foreign exchange market bearish for the local currency as the naira depreciated by N19.20 or 2.48 per cent week on week to N792.20 to the dollar from N773 at the parallel market as forex market and traders continue reacting to the forces of demand and supply.

 

At the I&E window, the naira depreciated by 1.0 per cent to N776.90 to the dollar with total turnover (as of 6th July) declining by 48.1 per cent to $367.23 million. Forex trades at the I&E window were consummated within the N600 and N820 per dollar band.

 

Analysis of the activities of the Naira at the Forward Contracts Market last week showed that the local currency weakened across all forward contracts against the dollar by 4.74 per cent, 4.59 per cent, 4.47 per cent, 4.14 per cent and 3.64 per cent to close at N801.22, N810.72, N820.24, N849.13 and N910.26 at the 1-month, 2-month, 3-month, 6-month and 12-month tenor contracts respectively.

 

Elsewhere, oil futures closed higher on Friday as the Brent Crude hit $78.50 per barrel, at the time of writing, as supply concerns begin to seep through on supply concerns following decisions by Saudi Arabia and Russia to cut production and export quotas. Also, the Bonny Light crude price took a reversal by 3.33 per cent, or $2.54 w/w, to close at $78.76 per barrel from $76.22 per barrel in the previous week.

 

As the foreign exchange market remains volatile in the near term, analysts at Cowry Assets Research say they anticipate the market to adjust in line with the prevailing forces of demand and supply trade in a calm position against the greenback barring any further market distortions.

 

-Leadership.

 

 

 

Foxconn: Apple supplier drops out of $20bn India factory plan

Apple supplier Foxconn has pulled out of a $19.5bn (£15.2bn) deal with Indian mining giant Vedanta to build a chip making plant in the country.

 

The move comes less than a year after the companies announced plans to set up the facility in Prime Minister Narendra Modi's home state of Gujarat.

 

Some analysts say it marks a setback to the nation's technology industry goals.

 

However, a government minister says it will have no impact on the country's chip making ambitions.

 

Taiwan-headquartered Foxconn told the BBC that it will now "explore more diverse development opportunities".

 

The firm also said the decision was made in "mutual agreement" with Vedanta, which has assumed full ownership of the venture, but did not give details on why it withdrew from the deal.

 

"We will continue to strongly support the government's 'Make in India' ambitions and establish a diversity of local partnerships that meet the needs of stakeholders," Foxconn added.

 

New Delhi-based Vedanta said it had "lined up other partners to set up India's first [chip] foundry".

 

"The surprise pull-out of Foxconn is a considerable blow to India's semiconductor ambitions," Paul Triolo from global advisory firm Albright Stonebridge Group told the BBC.

 

"The apparent cause of the pull-out is the lack of a clear technology partner and path for the joint venture," he added. "Neither party had significant experience with developing and managing a large-scale semiconductor manufacturing operation."

 

However, Rajeev Chandrasekhar, India's Minister of State for Electronics and Information Technology, said on Twitter that Foxconn's decision had "no impact on India's semiconductor fab[rication] goals. None."

 

Mr Chandrasekhar added that Foxconn and Vedanta were "valued investors" in the country and "will now pursue their strategies in India independently".

 

The Indian government has been working on strategies to support the chipmaking industry.

 

Last year, it created a $10bn fund to attract more investors to the sector, in a bid to become less reliant on foreign chipmakers.

 

Prime Minister Modi's flagship 'Make in India' scheme, which launched in 2014, is aimed at transforming the country into a global manufacturing hub to rival China.

 

In recent years, several other firms have announced plans to build semiconductor factories in India.

 

Last month, US memory chip giant Micron said it would invest up to $825m to build a semiconductor assembly and test facility in India.

 

Micron said that the construction of the new facility in Gujarat will begin this year. The project is expected to directly create up to 5,000 roles, and another 15,000 jobs in the area.-bbc

 

 

 

Privacy activists slam EU-US pact on data sharing

The European Commission has announced a pact with the US to allow easier legal transfer of personal data across the Atlantic.

 

Data privacy activists vowed to challenge the agreement in court.

 

President Joe Biden and EU officials welcomed the deal, which overcame objections about US intelligence agencies' access to European data.

 

The deal ensures Meta, Google and other tech giants can continue sharing information with the US.

 

Two previous attempts to create a legal framework on US-EU data sharing had been shot down in European courts over privacy concerns.

 

Monday's pact aims to ease European concerns over any personal information that ends up shared with US intelligence agencies.

 

Americans are mostly shielded legally from electronic snooping by US spy agencies, but foreigners are not.

 

The EU-US agreement allows Europeans to object if they suspect their data has been collected by American intelligence.

 

A Data Protection Review Court, made up of US judges, will be created to hear the claims.

 

The EU-US Data Privacy Framework, which goes into effect on Tuesday, also pledges only "necessary and proportionate" data will be collected.

 

EU Justice Commissioner Didier Reynders said the "robust" agreement meant "personal data can now flow freely and safely" from Europe to the US.

 

But non-profit group NOYB (None of Your Business), led by Austrian privacy activist Max Schrems, vowed to challenge the decision.

 

Mr Schrems said in a statement: "Just announcing that something is 'new,' 'robust' or 'effective' does not cut it before the [European] Court of Justice.

 

"We would need changes in US surveillance law to make this work and we simply don't have it."

 

Mr Schrems previously challenged Facebook's storage of data, saying it violated his European privacy rights, and the European Union's top court agreed.

 

President Biden paved the way for the final deal by issuing an executive order in October 2022 requiring US intelligence officials to add more data collection protections while balancing them with national security concerns.

 

Compared with the EU, the US has lenient privacy laws.

 

In May, the EU hit Facebook owner Meta with a $1.3bn (£1bn) fine, ordering the company to stop sharing European users data across to the US.

 

Meta has said without a legal outline for data transfers, it would be forced to stop providing its products and services in Europe.-bbc

 

 

 

Threads: Meta sets out planned new features

Threads is looking into adding an alternative home feed, of only posts, in chronological order, from the people each individual user follows, according to Instagram boss Adam Mosseri.

 

It currently shows a mix of recommended content and posts from those followed.

 

Threads was billed as an "initial version" at launch and the company has signalled more features are to come.

 

But a planned system to make Threads compatible with some other apps, such as Mastodon, has met with resistance.

 

Instagram, which is owned by Meta, built the Threads app.

 

Mr Mosseri posted the alternative home feed for Threads was "on the list" - a suggestion owner Mark Zuckerberg had given a "thumbs up", after a number of users expressed frustration at not being offered a feed of posts from people they followed, in the order in which they were posted.

 

Other features "on the list", according the Instagram supremo, include:

 

an ability to edit posts

translation into different languages

making it easy to switch between different Threads accounts

While it is possible to view Threads on the web, via Threads.net, there is no desktop interface - posts can be made only via the app - and that too was something the company was "working on", according to Mr Mosseri.

 

Table showing how Threads and Twitter compare

There is also no search function. When it announced the app's launch, the company said it would add a "more robust search function" along with improvements to the selection of recommended posts.

 

And the only way currently to fully delete a Threads profile is to delete the associated Instagram account, which many users would be reluctant to, another issue the company is looking to fix.

 

When Threads was launched, Meta announced it planned to allow it to communicate with other social-media platforms, such as Mastodon, using something known as the fediverse.

 

But this suggestion while welcomed by some, has met opposition.

 

'Clear victory'

The idea of the fediverse is it is like email. Someone on Gmail can exchange emails with someone using Hotmail, for example, and the fediverse could be described as that idea applied to social media.

 

At some point in the future Meta wants users to be able to use their Threads account to interact with other social-media platforms using ActivityPub - a protocol with the necessary programming code - such as Mastodon, WordPress or Reddit-alternative Lemmy.

 

But some worry Threads threatens the idea of this system altogether, because of a practice big tech companies have utilised in the past - "embrace, extend and extinguish", when a company with a lot of resources extends what is possible from a new technology so drastically it becomes the new standard, leaving people with no choice but to use its platform.

 

Mastodon chief executive Eugen Rochko dismissed these fears, saying Meta joining Threads was "validation of the movement towards decentralised social media" and "a clear victory for our cause".

 

But concern among users has grown with over a hundred Mastodon communities joining what they call the "fedipact" - an agreement to block Meta from being able to access their community under any circumstances - so even when Threads does begin to support ActivityPub, users will not be able to access everything on the fediverse.

 

One other feature coming to Threads at some point may also receive mixed reviews. There is no advertising on the platform - for now.-bbc

 

 

 

Air travel in Africa: Costly flights hold the continent back

Flying within Africa is more expensive than just about anywhere else in the world. Travellers pay higher ticket prices and more tax.

 

It is often cheaper to fly to another continent than to another African country.

 

For a quick comparison, flying from the German capital, Berlin, to Turkey's biggest city, Istanbul, will probably set you back around $150 (£120) for a direct flight taking less than three hours.

 

But flying a similar distance, say between Kinshasa, capital of the Democratic Republic of Congo, and Nigeria's biggest city, Lagos, you will be paying anything between $500 and $850, with at least one change, taking up to 20 hours.

 

This makes doing business within Africa incredibly difficult, and expensive - and it is not just elite travellers that are affected.

 

The International Air Transport Association (IATA) - the global trade body representing some 300 airlines which make up about 83% of world air traffic - argues that if just 12 key countries in Africa worked together to improve connectivity and opened up their markets, it would create 155,000 jobs and boost those countries' Gross Domestic Product (GDP) by more than $1.3bn.

 

"Aviation contributes directly to the GDP in every country. It generates work and it activates the economy," says Kamil al-Awadhi, IATA's regional vice-president for Africa and the Middle East.

 

Adefolake Adeyeye, an assistant professor of commercial law at the UK's Durham University, agrees that Africa as a whole is missing out because of its poor air service.

 

"It's been shown that air transport does boost the economy. As we've seen in other continents, budget airlines can improve connectivity and cost, which boosts tourism, which then creates many more jobs," she says.

 

The poor quality of road networks and lack of railways in many African countries often makes air transport the practical choice for cargo too.

 

The climate emergency, which has severely impacted Africa, means everyone needs to be more careful about their carbon footprint and should aim to fly a lot less.

 

But even though around 18% of the world's population lives in Africa, it accounts for less than 2% of global air travel and, according to the UN's Environment Programme, just 3.8% of global greenhouse gas emissions. This is in contrast to 19% from the US and 23% from China.

 

Africa may be rich in minerals and natural resources, but of the 46 nations on the UN's Least Developed Countries list, 33 are on the continent, and poverty continues to be the biggest daily threat for millions of people on the continent.

 

But there is also a growing middle-class who could potentially travel by air if the tickets were priced at similar levels to Europe or elsewhere.

 

African states have been trying for decades to integrate the aviation sector, but they haven't been successful, yet.

 

"There needs to be a coherent strategy by Africa to address the issue of its poor air service if they want to transform Africa's economies," says Zemedeneh Negatu, the global chairman of US-based investment firm Fairfax Africa Fund.

 

He says that flights within Africa are still structured around cumbersome bilateral agreements from one country to the next, and that most flag-carrying state airlines in Africa barely cover their costs, while some even run at a loss.

 

"Every government in Africa wants to see their flag on the tail of an aircraft at Heathrow or JFK airport, but African governments need to realise that stand alone carriers are not viable."

 

Mr Zemedeneh argues that African airlines should take inspiration from Europe and form major partnerships, such as between flag-carriers Air France and KLM of The Netherlands, and the Anglo-Spanish International Airlines Group (IAG) formed between British Airways and Iberia.

 

He says even in the rich market of Europe, conglomeration is the way forward for airliners to survive, and provide a cheaper more reliable service.

 

The current system in Africa is very fragmented, and although 35 countries are signed up to the Single African Air Transport Market, an African Union (AU) initiative to free up the skies to African airlines and bring down costs, it could be years before it's implemented.

 

IATA's Mr Awadhi says governments are reluctant to work together.

 

"There is a hard-headedness where each state thinks they know how to handle it better and will stick to their remedies even when they are not very effective," he says.

 

"In the end it's a business and there is a level of protectionism that starts to hurt the aviation industry. Then there is no benefit to having your own national carrier."

 

There is one notable exception in Africa of an airline that is absolutely thriving, and that could provide a blueprint for others to copy - Ethiopian Airlines.

 

Just over 15 years ago the company employed about 4,000 people. Now that figure is over 17,000.

 

It is state-owned but run entirely as a commercial venture without government interference.

 

It has more than doubled the size of its fleet of cargo and passenger planes and has made Addis Ababa a regional hub, driving foreign currency into the Ethiopian capital, and boosting the country's service industry.

 

At the turn of the millennium Ethiopia was one of the poorest countries in the world, now it's one of the fastest growing economies.

 

Mr Zemedeneh, an Ethiopian-American who played a key role as an adviser to Ethiopian Airlines as it developed its strategy, says Ethiopian Airlines has played a part in that boom.

 

"Ethiopian Airlines generates millions of dollars in hard currency for the country, and it makes every Ethiopian proud that they have been able to create one of the most successful indigenous African-owned, African-operated, multinational companies," he adds.

 

African travellers will be hoping these kinds of commercial successes will ultimately impact their airfares, bringing them down more in line with Europe or Asia - and that they can finally get to where they want to go more quickly and cheaply.-bbc

 

 

 

Prime: Top US senator calls for probe into KSI and Logan Paul energy drink

US Senate Majority Leader Chuck Schumer has called on regulators to investigate an energy drink promoted by high-profile YouTubers KSI and Logan Paul.

 

Mr Schumer alleges the drink is being targeted at children despite its high caffeine content.

 

Prime Energy contains 200mg of caffeine per can, which is around twice the amount in rival energy drink Red Bull.

 

Each drink carries a warning stating that it is not recommended for children under the age of 18.

 

However Mr Schumer, a Democrat, alleged that Prime Energy was packaged and marketed "in near identical form" as a caffeine-free drink from the brand.

 

As a result, some parents had unknowingly bought the caffeinated drink for their children, he told reporters in New York on Sunday.

 

"The FDA [Food and Drug Administration] must investigate PRIME for its absurd caffeine content and its marketing targeting kids on social media," he later said on Twitter.

 

Prime Energy "contains a comparable amount of caffeine to other top selling energy drinks, all falling within the legal limit of the countries it's sold in. It complied with all FDA guidelines before hitting the market," a Prime representative told the BBC.

 

"As a brand, our top priority is consumer safety, so we welcome discussions with the FDA or any other organisation regarding suggested industry changes they feel are necessary in order to protect consumers," they added.

 

In 2022, Logan Paul and KSI - who have around 48 million YouTube followers between them - launched the caffeine-free Prime Hydration drink.

 

It quickly became an online sensation, sparking long queues and even headfirst dives into shelves at stores.

 

The caffeinated Prime Energy drink was launched in January this year. It is promoted by the company as being sugar-free and vegan.

 

A warning on each can of the drink states that it is not recommended for children under the age of 18, people who are sensitive to caffeine, pregnant women or women who are breastfeeding.

 

Some schools around the world have sent out warnings about Prime drinks or banned them altogether.

 

Earlier this year, the Milton Primary School in Newport, Wales sent a message to parents warning them not to confuse the caffeinated and non-caffeinated versions of the drink after a pupil fell ill outside of school hours.

 

Meanwhile, the Maryborough State High School in Queensland, Australia issued a ban on energy drinks.

 

"There are some new energy or hydration drinks that have recently hit the market... some of which have 4 TIMES the caffeine or stimulant as 'regular' energy drinks," the school said in a post on Facebook.

 

"These can cause significant concerns in students with (potentially unidentified) health issues," it added.-bbc

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2023

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

Heroes’ Day

 

Aug 14

 


 

Defence Forces Day

 

Aug 15

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


CBZH

GetBucks

EcoCash

 


TSL

Econet

Turnall

 


First Capital Bank

ZBFH

Fidelity

 


Zimplow

FMHL

 

 


 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


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 s 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 d from third parties.

 


 

 


(c) 2023 Web: <http://www.bullszimbabwe.com>  www.bullszimbabwe.com Email:  <mailto:info at bulls.co.zw> bulls at bullszimbabwe.com Tel: +263 4 2927658 Cell: +263 77 344 1674

 


 

 

 

 

 

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