April 2023 / Focus Africa

$10 billion Funding to be mobilised by African Development Bank to increase food production in Africa for the next five years. AfDB estimated that the region could increase its agricultural output to $1 trillion by 2030. (Food Business Africa)

1000 MW  Floating solar project proposed by China Energy in Zimbabwe, which is currently meeting less than half of its energy needs. The $1 billion project will comprise 1.8 million solar panels installed at Kariba Dam. (Reuters)

2500 Charging stations for electric vehicles to be installed in Morocco over the next three years. the facilities will be distributed across major cities to promote import of electric vehicles. (Afrik21)

$77 million Facility provided to Bank of Africa by the IFC to support SMEs in ten African countries. This financing will support businesses in the agriculture, trade, construction and energy sectors, with a focus on increasing lending to women-led businesses. (Togo First)

42% Proportion of new micro, small and medium enterprises in Kenya that consider debt funding the preferred method of raising capital, according to a new report by the Kenya Startup Ecosystem. The study found that 36% and 22% prefer grants and equity financing, respectively. (Business Daily)

400 tonnes Titanium produced by a Chinese mining company being stored in Chibuto district in Mozambique awaiting export to the Asian market. High road transport costs between the southern region and the port at Maputo. Construction of a dock in locally in Gaza province is expected to reduce costs of export in the future. (Club of Mozambique)

$746 million Fund established by Agriculture Finance Corporation, Financial Sector Deepening Kenya and other partners to boost lending to farmers in Kenya with the objective of reducing food imports, increasing local output and spurring economic growth in the sector. (Business Daily)

42% Drop in spending on motorcycle imports recorded in Nigeria in 2022 to $458 million. The downward trend can be attributed to by the ban on operations of commercial motorcycles in six local government areas in Lagos State. (Vanguard)

4 Moroccan banks feature in Forbes' listing of the 50 most valuable lenders in the Middle East and North Africa. Growth in Morocco's banking sector is underpinned by the industry's continental expansion strategy, with the leading banks controlling some 28% of the banking market in West Africa. (Morocco World News)

$667 million Contracts signed between Tanzania and three Australian firms to mine graphite and rare earths. Th deals are part of the East African country's push to boost the mining sector to contribute to 10% of the economy. (The East African)

1100 MW Renewable energy production targeted in Zimbabwe after incentives were introduced to attract capital for projects with a less negative impact on climate. The incentives include government guarantees for investors to remit dividends in foreign currency. (The Herald)

46% Proportion of Spain's vegetables sourced from Morocco, according to new data from Informa's DBK Sector Observatory. Morocco is the largest vegetable exporters to the EU, despite inflation and soaring prices in the country. (Morocco World News)

Review by Kili Partners . Powered by Asoko Insight

On 13 April 2023, the Federal Inland Revenue Service (FIRS) disclosed plans to continue participating in the OECD/Inclusive Framework discussions to ensure that Nigeria and other developing countries maximize the benefits of the two-pillar solution. This development followed a technical workshop between the OECD and Nigeria which was held on 4–5 April 2023. The workshop focused on examining the benefits of the two-pillar solution and discussing the position of Nigeria regarding the rules being developed under the two-pillar solution.

Following, the workshop, the FIRS issued a statement making recommendations as follows:

• Nigeria should engage stakeholders to draw up a national strategy to streamline its tax incentives to avoid ceding its tax base to other jurisdictions owing to the implementation of the Pillar Two rules;
• Nigeria should take immediate steps to forge and implement tax policy actions in response to Pillar 2, including, but not limited to, changing the income tax rule to increase its effective tax rate to a minimum of 15% or introducing a qualified domestic minimum top-up tax (QDMTT);
• Nigeria should explore the effective implementation of the Pillar 2 rules for increased tax revenue generation to fund government programmes, boost the economy and ensure that Nigeria remains an attractive investment location; and
• Nigeria should continue to participate in the rule development to protect national interests and improve understanding of the rules to formulate necessary policy responses.

On 13 April 2023, the International Monetary Fund (IMF) reiterated its advice to Nigeria to broaden the tax base (i.e. expand taxable persons and raise taxes) and cut borrowings to reduce its debt burden. The IMF has also advocated for the removal and reallocation of the fuel subsidy to the health and education sectors.

The IMF's Division Chief, Fiscal Affairs Department, stated that Nigeria needs a medium-term plan to reduce debt vulnerabilities. Tax hikes would facilitate the country's ability to manage debt and reprioritize its expenditure.