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Stock Market / Finance in East Africa

  • President Magufuli delivers a speech during his swearing-in ceremony in Dar Es Salaam

    TANZANIA, 2016/05/22 Tanzanian lawmakers have gathered in the capital Dodoma to debate the initial budget of President John Magufuli’s government. It contains a 13 % increase in funding for development projects that will be paid for through tax rises and spending cuts in other areas, the country’s data minister tells us. “People have a lot of expectations because this is the budget where the government will start implementing whatever has been promised in the election manifesto,” said Data Minister Nape Nnauye.
  • Uganda: Interest On External Debt Rises to Shs250b

    UGANDA, 2016/04/30 Uganda is projected to pay Shs250b in the next financial year in interest payment for the country's external deficit. The all, according to the Parliament Finance Committee, will rise from the Shs170b government paid this financial year. This means that each of the 34 million Ugandans - a lot of of whom earn less than Shs300,000 monthly - would have to, figuratively pay Shs440,000 to repay Uganda's Shs14.915 trillion external deficit.
  • Mozambique: Secret Loans: What Happens Now?

    MOZAMBIQUE, 2016/04/30 Like a naughty schoolboy caught smoking in the bike shed who is again summoned to the school principal's office, Prime Minister Carlos Agostinho do Rosario flew to Washington to appear before IMF Managing Director Christine Lagarde. Apparently he confessed to her that at least $1.35 billion in loans were taken out in secret without telling parliament or donors - or, most importantly, the IMF. At least $2.2 bn - equivalent to all government spending for five months - has been squandered in secret on boats of dubious necessity and, it is widely assumed, on corrupt payments. So, what happens presently? There are two guiding principles which will shape whatever happens. Initial, Frelimo is obsessed by maintaining unity at all costs. Ever since Eduardo Mondlane was assassinated in 1969, Frelimo has realised that it can only gain and keep power by not splitting up. That means no one is expelled from the party no matter how corrupt or incompetent they are; anyone who may be a threat is given a sinecure. Disputes are settled within the party and the aim is for win-win agreements.
  • Mozambique: Secret Loans: What Happens Now?

    MOZAMBIQUE, 2016/04/29 Like a naughty schoolboy caught smoking in the bike shed who is again summoned to the school principal's office, Prime Minister Carlos Agostinho do Rosario flew to Washington to appear before IMF Managing Director Christine Lagarde. Apparently he confessed to her that at least $1.35 billion in loans were taken out in secret without telling parliament or donors - or, most importantly, the IMF. At least $2.2 bn - equivalent to all government spending for five months - has been squandered in secret on boats of dubious necessity and, it is widely assumed, on corrupt payments. So, what happens presently? There are two guiding principles which will shape whatever happens. Initial, Frelimo is obsessed by maintaining unity at all costs. Ever since Eduardo Mondlane was assassinated in 1969, Frelimo has realised that it can only gain and keep power by not splitting up. That means no one is expelled from the party no matter how corrupt or incompetent they are; anyone who may be a threat is given a sinecure. Disputes are settled within the party and the aim is for win-win agreements.
  • Mozambique: IMF Suspends Standby Credit Facility Loan,

    MAPUTO CITY, 2016/04/21 The International Monetary Fund (IMF) has confirmed the suspension of the second installment of the loan to Mozambique of 283 million US dollars from the Fund's Standby Credit Facility (SCF). The suspension was suspected instantly the IMF announced, last Friday, that it was cancelling the mission that had been due to visit Mozambique this week because of the “undisclosed loans”, which the IMF put at over a billion dollars. The SCF is a means of providing financial assistance to low gain nations with short term balance of payments problems. In late October 2015, Mozambique applied for a loan of 204.5 million Appropriate Drawing Rights (about 282.9 million dollars) from the SCF. The IMF governing board granted the request and the initial instalment (about 118.9 million dollars) became available in December.
  • Ethiopia: Independent Monetary Policy Curbs Inflationary Momentum

    ETHIOPIA, 2016/04/20 Rosy reports are typical under the policy of the Revolutionary Democrats. Institutions do their best to highlight their positive performances and get praised for them. This trend is so pervasive within the national structure that government reports are received with grains of suspicion in academic and international financial sectors. It is therefore not surprising to see that the initial six-month statement of the National Bank of Ethiopia (NBE), the ultimate monetary authority, paints a blissful image of the economy. Led by Teklewold Atnafu, a governor treated additional as a politician than technocratic policymaker, the central bank departed from popular perception in its statement which declares that the economy is stable. This stability, according to the statement, comes as a result of the tight monetary policy stance being followed in the fiscal year.
  • Government of Mozambique concludes Ematum’s debt restructuring

    MOZAMBIQUE, 2016/04/07 The government of Mozambique has completed restructuring of the deficit taken on to finance Mozambican tuna company Ematum, which was converted from commercial to sovereign deficit held by the national, the government spokesman saidMonday. Government spokesman and Deputy Health Minister Mouzinho Saide, said next a Cabinet conference that the agreement signed with investment banks Credit Suisse and Russia’s VTB Capital extends the deficit repayment period for two years and reduces the annual all payable.
  • Exim Bank of China considers request for loan to Mozambique

    CHINA, 2016/03/26 The Export-Import Bank of China (Exim) is considering a request from Mozambique for a loan of US$156 million to accelerate the digital migration process in the country, said the Mozambican Minister for Transport and Communications. The deadline for migration from analogue to digital in Mozambique, initially set for June 2015, was missed, and the government presently plans to speed up the process, according to minister Carlos Mesquita, cited by Mozambican newspaper O País. The minister as well said Chinese company StarTimes, which has been awarded the arrangement, approved the disbursement of US$30 million, to be used for an order of specific digital equipment for Mozambique.
  • United States has donated almost US$6 billion to Mozambique

    UNITED STATES, 2015/12/31 Over the last 30 years the United States has donated almost US$6 billion to Mozambique, said the outgoing ambassador Douglas Griffiths in a farewell letter. In the letter, the ambassador said the US wants “nothing but the best” for Mozambique, “because we firmly believe that the success of one country benefits all the others.” Referring to the all of US$6 billion, Griffiths said this all had not been provided as loans but as donations, particularly for development projects in health, education, agriculture and support to improve the business climate.
  • Is Kenya’s Tax Policy Optimal?

    KENYA, 2015/12/16 Last week a slate of new taxes were effected increasing the prices of goods such as bottled water, cars, beers and cigarettes. Although these items can be viewed as luxury items rather than essential commodities, the tax hike calls Kenya’s tax policy into question. The government has made it clear that it seeks to expand its tax base and rope in additional individuals and businesses into the tax net inclunding introduce new taxes to strengthen revenue generation. However, does the current tax policy contribute to or detract from revenue generation inclunding economic increase? On one hand are those of the view that current tax policies are subpar for several reasons. Firstly, some analysts argue that of the 2.4 million people who are formally employed, only 1.4 million (inclunding corporations) are taxed. This is significant because, according to the Institute of Economic Affairs (IEA), of the total tax revenue collected by the government over the last decade, the major contributors are gain tax, about 40% followed by VAT at 28%. Secondly, even of those taxed, the limited reach of the taxman, and laxity and corruption therein, facilitate tax evasion. For example, a lot of businesses particularly in the informal sector are not taxed; this should be rectified. Thus those in this camp are of the view that KRA can do additional to expand the tax base, curtail tax evasion and collect additional revenue.