May 2021 / Focus Africa

May 30 2021

Africa in Review by the Numbers (May 2021)

$850 million
Value of the winning bid in Ethiopia's telecoms auction. The licence was awarded to a consortium led by Kenya’s Safaricom, with Vodafone and Vodacom, as well as the UK's CDC and Japan’s Sumitomo. The consortium has committed to investing $8.5 billion in its network over the 10-year licence period. (Bloomberg)  
40 MW
Generation capacity of the Khoumagueli solar project in Guinea, which becomes the country's first grid-connected PV project with the signing of a 25-year power purchase agreement. Developed by InfraCo Africa, Aldwych Africa Developments and Solveo Energie SAS, the agreement highlight's the state's commitment to green energy. (Renewables Now)  
27%
Fall in business handled by the representative offices of foreign banks in Kenya in 2020. Hit by the disruptions in international trade and investments caused by the Covid-19 pandemic, the nine offices transacted deals worth $3.42 billion, down from $4.67 billion in 2019. (Business Daily)  
$2 billion
International Finance Corporation's investment to support small businesses in Africa and boost international trade as part of efforts to bolster the continent's recovery from the pandemic. The financing will be split between direct support to businesses and trade finance facilities. (Reuters)  
205%
Increase in health sector investment in Egypt. This rise is attributed to financing for outlets that deal with Covid-19 patients, especially the development of 23 lung and chest specialised hospitals, 42 fever specialised hospitals, quarantine units and central laboratories, amongst other investments across the country. (Egypt Today)  
73,000 acres
Amount of land allocated to investors in Kenya's Konza Technopolis. Phase one of the Konza project, which sits on 410 acres of land, is distributed into mixed-use (89 acres), university (39 acres), residential (26 acres) and life science (26 acres). (Business Daily)  
82%
Year-on-year increase in the value of electronic payments made in Nigeria during the first quarter of the year bringing the total to $174 billion. Mobile money operators led the transaction growth, which was driven by Covid-related restrictions on in-person shopping. (Vanguard)  
$31 billion
Value of multilateral investment into African infrastructure in 2020, representing a decline from $55 billion in 2019 and $100 billion in 2014. Despite this downward trajectory, a new report finds encouraging signs in changing global patterns of investment and the rising role of DFIs in supporting Africa to address its infrastructure shortfalls. (ESI Africa)  
123 MW
Capacity of the Golden Valley Wind Energy project, which reached commercial operations this week. The facility is the largest of four renewable projects undertaken in South Africa by BioTherm Energy, backed by Thebe Investment Corporation. Collectively, the four investments will connect 284 MW to the national grid. (Off-Grid Energy Independence)  
$6 billion
European Investment Bank engagement in public and private investment across Africa to transform access to green energy, clean water, private sector growth and COVID-19 resilience. This represented the largest annual EIB engagement in 55 years of operations on the continent. (European Investment Bank)  
43%
Kenyan sugar imports to be sourced from Uganda after the signing of an agreement which will see Uganda export 90,000 tonnes to its neighbour. According to the Association of Sugar Manufacturers, Uganda has seen stockpiles grow, peaking to 150,000 tonnes in the last two years due to blockades imposed on the commodity. (Daily Monitor)  
1000 km
Length of the Ghana-Burkina railway, construction of which is set to begin in January 2022. The project, which will take five years to complete, is expected to preserve Ghana's roads and accelerate the movement from the port of Tema to Ouagadougou. (Ghana Web)  
$17 billion
Amount pledged by development banks to support food security in Africa as governments aim to double agricultural production. The commitment to boost productivity, made at an event hosted by the AfDB and IFAD on 29-30 April, will be achieved through the scaling up of agro-technologies, investing in access to markets, and promoting agricultural research and development. (EIN Expresswire)  
400,000
Number of households to be linked to the electricity grid in Mozambique after the government mobilised $280 million to implement its Energy for All programme. This is following the government’s five-year target for the period 2020-2024 set to increase the number of people with electricity in their homes from 34% to 64% of the population (ESI Africa)  
600 km
Length of the $1 billion gas pipeline between to be constructed between Mombasa (Kenya) and Dar es Salaam (Tanzania). This project will enhance “energy sufficiency” with Kenya keen on importing gas from Tanzania’s nascent plant. (Ghana Web)   Review by Kili Partners . Powered by Asoko Insight
May 18 2021

Negotiations Underway for Social Security Agreements Between BRICS Countries

According to a press release of 13 May 2021, published by the Indian Ministry of Labour & Employment, the BRICS countries (Brazil, China (People's Rep.), India, Russia and South Africa) resolved to enter into discussions with each other leading towards the signing of social security agreements between them, during the 1st BRICS Employment Working Group (EWG) Meeting held virtually from 11 to 12 May 2021. Further developments will be reported as they occur.
May 20 2021

Tax Authority to Provide Electronic Invoicing Systems to Taxpayers

Rwandan taxpayers are urged to apply to the Rwanda Revenue Authority (RRA) for the appropriate electronic invoicing system depending on the business of the taxpayer.

Different electronic invoicing systems will be provided to different taxpayers as follows:

  • an electronic billing machine (EBM) software which is specifically designed for large and medium taxpayers as well as other taxpayers who may apply for it;
  • an EBM mobile system which is available for taxpayers whose turnover does not exceed RWF 20 million; and
  • an online EBM solution for taxpayers in the service industry such as lawyers and consultants whose turnover does not exceed RWF 20 million.

The RRA will also avail an online sales data controller and a virtual sales data controller to taxpayers with their own electronic invoicing systems.

The announcement by the RRA was made on 14 May 2021.

May 18 2021

Algeria Ratifies African Continental Free Trade Area Agreement

On 5 April 2021, Algeria ratified the African Continental Free Trade Area Agreement (AfCFTA), by way of Presidential Decree No. 21-133, as published in Official Gazette (Journal Officiel de la Republique Algerienne) No. 36 of 16 May 2021. Further developments will be reported as they occur.

May 20 2021

Africa Tax Administration Forum Sends Revised Pillar One Proposals to Inclusive Framework

The African Tax Administration Forum (ATAF) has sent revised Pillar One proposals to the OECD Inclusive Framework. The ATAF proposals respond to both the Inclusive Framework blueprint report released for public consultation in October 2020 and the recent US proposals to revise the blueprint proposals.

ATAF proposals state that the Amount A proposal under Pillar One which is based on a single market revenue threshold for all economies is complex, inequitable and would result in very little reallocation of taxing rights to market jurisdictions, in particular to smaller market jurisdictions.

To ensure simplicity, ATAF proposes a single global threshold rule for all MNEs generating global sales revenue above a certain amount (irrespective of their business activities) but that the exclusions proposed in the Pillar One Blueprint should still apply.

To ensure equity, ATAF proposes that the reallocation of profits, which it refers to as "Amount D", be calculated as a portion of the MNE's total profits instead of its residual profit. "The quantum of Amount D would be a return on Market Sales based on the Global Operating Margin of the MNE group using a tiered approach whereby the higher the Global Operating Margin of the MNE the higher Amount D would be''. ATAF adds that Amount D would be allocated to a market jurisdiction to the extent it exceeds the arm's length profits reported in the market jurisdiction for the relevant period.

ATAF expressed that elements of it proposal are similar to the US proposal as:

  • both proposals bring all business sectors into the scope of Amount A except those excluded in the Pillar One Blueprint;
  • both proposals exclude differentiation in profit allocation between Automated Digital Services (ADS) and Consumer Facing Businesses (CFB); and
  • in both proposals there would be minimal business segmentation.

ATAF noted that its proposal would address the complexities of the global threshold rule and that with its simplification there appears no reason why the threshold would not be lowered to €250 million'.

The ATAF proposal also confirms the G-24 working group of developing countries proposal.  The G-24 proposal called for a fractional apportionment allocating part of an in-scope MNE's global profits to market jurisdictions in which it has significant economic presence. Significant economic presence would be tied to a formula based on objective criteria.

The ATAF Proposal on Pillar One was released on 12 May 2021.

Note: The ATAF member countries are Benin, Botswana, Burkina Faso, Burundi, Cameroon, Chad, Comoros Islands, Ivory Coast, Egypt, Eritrea, Gabon, Gambia, Ghana, Kenya, Lesotho, Liberia, Madagascar, Mali, Malawi, Mauritania, Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, South Africa, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.