August 2021 / Focus Africa

31 Agosto 2021

Africa in Review by the Numbers (August 2021)

$2.75 billion
Value of the African Development Bank's recently launched 5-year Global Benchmark bond, its second of the year. With this latest issue, the bank continues to carry out its funding strategy of issuing large liquid benchmark transactions (AfDB)  
Stake in container terminal port operator Marsa Maroc that the Moroccan government plans to sell to Groupe Tanger Med, operator of the Mediterranean's largest port. The sale is part of the state's efforts to manage its budget deficit and overhaul state-owned enterprises through privatisation and mergers. (The North Africa Post)  
Number of new branches of Kukito fast food outlets, Java House restaurant chain plans to open in Nairobi in the next five years, bringing more competition to quick-service eateries in Kenya's capital. (Business Daily)  
$100 million
Investment by the IFC in Egypt's first private sector green bond. Issued by Commercial International Bank (CIB), the country’s largest private bank, the bond will help CIB increase lending to businesses that want to invest in eco-friendly initiatives (Daily News Egypt)  
Increase in the value of cash transactions executed via mobile phones in Kenya in the first six months of the year over the same period of 2021. The record value of $30 billion reflects the continued economic recovery after the Covid-19 lockdowns of last year. (Business Daily)  
Units proposed under Eskom's restructuring plans. The South African power company put out a call for financial advisors to support its unbundling into transmission, generation and distribution units to better manage its debt profile. (Business Tech)  
$3 million
Financing raised by B2B logistics platform Omnibiz to digitise supply chain management for informal retailers in Nigeria. The seed round will support the startup to expand its asset-light distribution model from four cities to six. (Tech Crunch)  
Investors in the initial public offering (IPO) of Tanzanian agribusiness firm, Jatu, on the Dar es Salaam Stock Exchange. Led by local investors, the IPO raised $7.6 million for the youth-led firm, which will be used to finance commercial farming and processing activities. (Daily News)  
Kenya's share of tea sold via the Mombasa auction, highlighting the country's position as the leading exporter in the region. However, Rwandan tea ranks first in terms of price, at $2.46 per kilo compared to $2.07 per kilo for Kenyan tea. (Business Daily)
$34 million
Injected into Africa's first renewable energy yieldco. UK Climate Investments has established this innovative green finance vehicle alongside Investec Bank Limited and Eskom Pension and Provident Fund. Managed by Revego, the initial portfolio comprises stakes in six projects located across South Africa. (ESI Africa)  
100 years
Production supported by resources at Kenmare Resources's titanium mineral mine in Mozambique at current rates of output. The company, which is one of the world's leading producers of titanium minerals, saw a 278% jump in profits in the first half of the year on the back of increased production and sales. (Club of Mozambique)  
Number of Massmart grocery stores in South Africa acquired by Shoprite's grocery unit, Checkers, in an $89 million deal. Walmart-owned Massmart is selling off its fresh food operations to focus on its better performing businesses as it seeks to return to profitability. (Food Business Africa)  
$2 billion
Value Chinese-backed African fintech start-up, OPay, after it raised a $400 million in a round led by SoftBank. The Series C raise is a record in Africa's tech scene and makes OPay the continent's third unicorn after Jumia and Flutterwave. (Techcrunch)  
Protection Designation of Origin (PDO) certificate issued by the EU to an African product. South Africa's rooibos tea will now receive the same protection as Champagne, Porto, Queso Manchego and other iconic products, creating greater product recognition and demand. (Food Business Africa)  
162 MW
Generation capacity added to the Inga II hydropower plant on the Congo River with funding from Kamoa Copper SA and the DRC's power company. The upgrade will bring the plant's capacity to 240 MW. The Kamoa-Kakula Copper Mine will have priority access to the power generated, furthering its aim to be the greenest copper producer. (ESI Africa)   Review by Kili Partners . Powered by Asoko Insight
12 Agosto 2021

Government Launches United Kingdom Declaration Facilities for Voluntary Offshore Assets Regularization Scheme

The Federal Government of Nigeria has opened United Kingdom declaration facilities based in London for the Voluntary Offshore Assets Regularization Scheme (VOARS). This is the third facility after the Nigeria (based in Abuja) and Dubai facilities. Under the VOARS, pursuant to the Presidential Executive Order 008 2018 Amendment 2019, relevant persons or their intermediaries can regularize their residual (offshore) assets located anywhere in the world by the payment of a one-time levy. All proceeds from the VOARS are to be invested in infrastructure development through Nigeria Essential Infrastructure Fund (NEIF).

Relevant persons or their intermediaries (upon presentation of a valid power of attorney) may make declarations through any of the three facilities in Abuja, Dubai or London. Upon such declaration, the declarant will benefit from the government's permanent waiver of prosecution for offences related to the offshore assets voluntarily declared under Special Clearances and Non-Prosecution Agreements.

According to the Attorney-General and Minister of Justice, the declaration will also offer banks, asset managers, trusts and other intermediaries the opportunity to clean their books whilst regularizing undeclared assets under their custody. The Minister of Finance noted that in addition to the numerous benefits of the scheme, declarants and their custodian banks can also invest parts of the regularized assets and earn high returns whilst investing in the country's infrastructure development.

27 Agosto 2021

Kenya Enacts Direct Taxation Amendments Aimed at Widening Tax Base

The Kenyan government enacted several tax amendments related to direct taxation including the deeming of family trust income as chargeable income. This income will, however, be exempt if the family trust is registered.

More details of the various amendments which unless otherwise indicated will apply from 1 July 2022 relating to direct taxation are as follows:

  • exempting the following from minimum tax:
    • persons whose retail price is controlled by the government;
    • persons engaged in insurance business;
    • persons engaged in manufacturing businesses whose cumulative investment from 2017 to 2021 is at least KES 10 billion; and
    • persons engaged in distribution businesses whose income is wholly based on a commission and persons licensed under the Special Economic Zones Act;
  • family trust income is deemed as income chargeable to income tax;
  • applying an income tax exemption to registered trusts on:
    • any amount that is paid out of the trust income on behalf of any beneficiary and is used exclusively for the purpose of education, medical treatment or early adulthood housing;
    • income paid to any beneficiary which is collectively below KES 10 million in the year of income; and
    • such other amount as the Commissioner General of the Kenya Revenue Authority (Commissioner) may prescribe from time to time;
  • exempting the transfer of property to a family trust from capital gains tax;
  • exempting registered family trusts from income tax;
  • introducing withholding tax on deemed disbursements to trust beneficiaries at a rate of 25% except where such income is exempt from tax; and
  • the new limitation of interest deductibility rule, which will take effect on 1 January 2022, will not apply to banks or financial institutions licensed under the Banking Act or to micro and small enterprises registered under the Micro and Small Enterprises Act 2012. This rule limits the deductible interest expense to 30% of the earnings before interest, taxes, depreciation and amortization (EBITDA;
  • the double taxation agreements or arrangements shall be subject to the Treaty Making and Ratification Act 2012;
  • extending the transitional period on capital allowances claimable relating to capital expenditure for bulk storage and handling facilities supporting the Standard Gauge Railway to 31 December 2022;
  • reintroduction of the definition of farm works with effect from 1 January 2022. "Farm works" means "farmhouses, labourers quarters, any other immovable building necessary for the proper operation of the farm, fences, dips, drains, water and electricity supply works and other works necessary for the proper operation of the farm". The Finance Bill 2021 had only proposed a review of the definition of "manufacture" and reintroduced a definition of "civil works" to include:(i) roads and parking areas; (ii) railway lines and related structures; (iii) water, industrial effluent and sewerage works; (iv) communications, electrical posts, pylons and other electrical supply works; and (v) security walls and fencing; and
  • introducing investment deductions at 100% with effect from 1 January 2022 where:
    • the investment value outside Nairobi City County and Mombasa County in that year of income is at least KES 250 million;
    • a person has invested in a special economic zone; and
    • the cumulative investment value in the preceding 3 years outside Nairobi City County and Mombasa County is at least KES 2 billion: Provided that where the cumulative value of investment for the preceding 3 years of income was KES 2 billion on or before 25 April 2020, and the applicable rate of investment deduction was 150%, that rate shall continue to apply for the investment made on or before 25 April 2020.