Monday April 15, 2019
Monday, April 15, 2019
Monday April 15, 2019

African Daily Voice

China-Exim Bank to give Zimbabwe US$72 million

Cameroon Tribune (Yaoundé)

Cameroon: Protection of Children - First Lady Equips Health Unit

The Monitor (Kampala)

Uganda Bans Chili Exports to EU

The Observer (Kampala)

Uganda: Women Entrepreneurs Share Their Success Stories with Youth

The Monitor (Kampala)

Uganda: Museveni Warns UPDF On Tribalism

Government of Ghana (Accra)

Ghana: President Akufo-Addo Inspects 1D1F Project in Tanoso

The Guardian (Lagos)

Nigeria Seeks AfDB's Intervention on ICT Infrastructure for Industry 4.0

Government of Ghana (Accra)

Ghana: President Akufo-Addo Assures of Equitable Distribution of Infrastructure in New Regions

TAP – Tunisia

Delegation of 25 Tunisian business people to visit Saudi Arabia on April 21 and 22

Morocco World News – Morocco

Morocco’s EMSI Wins 2 Gold Medals at Geneva’s Exhibition of Inventions

Ahramonline – Egypt

GERD tripartite ministerial meeting postponed over Sudan developments

The Herald (Harare)

Budget surplus a sign of fiscal discipline

The Treasury Quarterly Bulletin (2018 Fourth Quarter) released last week showed that Government has arrested budget deficits and is on the right track to achieve its economic growth targets.

The report indicates that the country recorded a budget surplus by December 2018, against a background of improving revenue collections.

Revenues rose by 43,4 percent to US$1,69 billion, surpassing the set target of US$1,18 billion on the back of the implementation of austerity measures.

We all recall that when Professor Mthuli Ncube was appointed Minister of Finance and Economic Development for the Second Republic, the first thing he talked about was to arrest budget deficits.

With support from President Mnangagwa, the Transitional Stabilisation Programme, which runs from October 2018 to December 2020, was drafted and confirmed the position that fighting budget deficits is a priority.

It then makes good news to hear that within a few months, Government has made strides in dealing with the budget deficit and the country is now on the right track to eradicate it altogether.

The importance of dealing with the budget deficit cannot be overemphasised, for it anchors the economic growth of any country.

When a country has a budget deficit, it means spending exceeds its income. If the deficit is not addressed, it then creates debt, whose interest makes the debt grow each year.

When a country has a high debt, it finds it difficult to raise funds to finance its developmental agenda because creditors consider it too risky because they doubt its ability to pay back.

A budget deficit ends up creating a burden of indebtedness as it pushes interest rates and lowers investors’ interest.

This is why there is every reason to celebrate when it is announced that Government has managed to arrest this monster, which has been a major hindrance to the country’s economic development for some time.

It shows that it is not a fluke when President Mnangagwa says that the Government is on the right trajectory in its efforts to turn around the economy and achieve Vision 2030 of an upper middle-income status.

The successful fight against budget deficit is a sure sign that Government’s strategy has been to address the salient fundamentals that ordinary citizens do not always cite as an impediment to economic growth.

Yet such fundamentals, if left uncorrected, have a major bearing on the state of the easily noticeable problems affecting the economy. What is now needed is for people to be calm and patient as the Government sets the right foundation for the turning around of the economy.

Very soon, the problems that people cite as affecting the economy will be corrected in line with the right fundamentals that would have been set.

People should stop relying on pseudo economists and alarmists who want to give an impression that everything has gone haywire, when in actual fact the fundamentals necessary to growth take-off are being addressed.

There should be a balance between the situation we face today and where we are coming from.

The New Dispensation inherited an economy that had been riddled with skewed fundamentals that were responsible for a turndown in almost every facet of the economy.

It cannot obviously take a few days to correct such a situation, as the task at hand is mammoth.

But addressing such a crucial economic fundamental like the budget deficit within such a short time shows that Government has the right vision for the country. Very soon, everything will start falling into place as one fundamental after another is tackled.

In our view and analysis, yes, the targets set by Government are ambitious considering where we are coming from, but they are attainable as we are beginning to witness.

With the bold, concrete and comprehensive plans being undertaken to reform the economy, we do not envisage anything that can hinder us from achieving the economic targets.

Such tough measures are expected to bring some pain, but the pain will not last forever as all fundamentals will soon start falling into place.

The most pressing task at the moment is for people to free their minds from the thinking that Zimbabwe cannot rise from the ashes to become an economic giant in Africa and the world.

There is need to break away from the old way of looking at things and start having a positive frame of mind towards achieving the set goals.

And it is important that Government is leading the way.

The Herald (Harare)

Zimbabwe: Securities Picking Strategies - Growth Investing

Growth investors focus on the future potential of a company, with less emphasis on the present price. Growth investing is about identifying the companies that are exhibiting behaviours that suggest that they will be tomorrow's leaders.

This simply means that growth investing is an active attempt to build up your portfolio and generate more return on the capital that you invest. Growth investing is dependent on time horizons and an investor's appetite for risk. Here are some growth investing tips:

Invest in fast-growing companies

These are usually found in today's fast-growing industries, where revolutionary new technologies and services are being created. It is advisable to favour lesser-known securities that have yet to reach the point of peak perception. Frequently these will be smaller securities, where there is greater growth potential.

Buy securities with Strong Relative Performance (RP) lines

Relative performance studies are a great way to identify successful companies and to avoid problem companies. Investors should buy securities that are consistently outperforming the market. This is a good indication that they are under accumulation, and that the companies are succeeding. The best growth investing tips come from the performance of the securities themselves.

Use market timing to guide

your growth investing

Be cautious when the broad market is against you and aggressive when it's with you. Don't underestimate the power of the market to move securities, both up and down. When market timing indicators are signalling a bull market, don't delay. The trend is upwards, so securities will be going up! Buy your favourite securities and hang on if the ride is profitable.

Cut losses short

This is the key to ensuring that investors retain enough capital to stay in the game. No matter how hard one tries, they are going to select securities that go against them as soon as they buy them. Investors should get rid of these securities quickly.

****

This Day (Lagos)

Nigeria: The Discord About VAT

By Boniface Chezea

Boniface Chizea argues that it makes sense to increase value added tax

Recently discussions regarding the proposal to increase the Value Added Tax (VAT) rate currently at five per cent have been trending and as usual there has been opposition to this proposal. I suppose an urgency to this proposal has been found as the fiscal authorities scamper in search of additional revenue sources to fund the recent approved increase on the minimum wage. This proposal has been opposed by some powerful voices which climaxed during the Bola Tinubu 67thbirthday colloquium in Abuja. Bola Tinubu during his remarks at the colloquium had cautioned the government not to increase the rate of VAT as he argued that it could be counterproductive as it would worsen the economic hardship in the land as the purchasing power of the population would be further depressed as a result of inflation. Closely aligned with this observation is the fear that such an increase would affect capacity utilization negatively which will lead to further job losses. Not long after Peter Obi, the Vice-Presidential candidate of the Peoples Democratic Party (PDP) congratulated Tinubu for his caution to the government as he shared the view that no positive outcome should be expected from the proposed increase but instead tax rates should be relaxed to act as an incentive to investors. He further argues that, 'It's extremely unrealistic for anybody to think of growing the economy of this country, and creating jobs just by increasing tax; it is a simplistic approach.' But as would be explained subsequently, all this opposition is due to the fact that compatriots have a mindset that perceive VAT just like any other tax; which of course reflexively must be opposed but fortunately as would soon be made amply clear it is not.

The intention to increase the VAT from the current rate of five per cent has been on the cards right from its first outing in 1993 as a replacement to the extant sales tax when the initial proposal was a VAT rate of 10 per cent but was upon introduction negotiated down to the current five per cent. An attempt was also made to increase this rate following a review of the act in 2007 without success following widespread opposition. But my take, up front regarding these remarks is that to a large extent the opposition is populist and ill-informed and are not aligned with the received technical knowledge on this matter. We hope to expatiate and shed better light on this observation during the course of this discussion.

What really is Value Added Tax? VAT is a consumption tax which is a type of indirect tax which the final consumer of designated goods and services are obliged to bear. It contrasts with direct taxes such as the personal income tax, company tax, petroleum profit tax, capital gains tax, etc. This tax is administered by the Federal Inland Revenue Services which collects the receipts into a pool which is shared amongst the federal government, the state governments and the local governments respectively in the ration of 15, 50 and 35 per cent. The tax does not include all goods and services produced in the country. Exported goods, medicine and pharmaceutical products, products for kids, basic food items, commercial vehicles and spare parts, books and educational materials, fertilizers, farming machines, agric. products, transportation and equipment, vet. medicines, magazines and newspapers, amongst others, are all exempt from this tax. Therefore the application of this tax is selective and not across board as it is being made to appear and for justifiable reasons there is no reason the list of excluded items cannot be increased.

The proposal by FIRS is to increase the rate between 35 to 50 per cent, that is an increase from the current five per cent to 6.75 and 7. 25 per cent. For comparability purposes it is salutary to observe that VAT rates in selected African countries are as follows; Ghana 15%, South Africa 15%, Egypt 14%, Rwanda 18%, Kenya 16%, Angola 10%, Algeria 19%. Therefore even if the proposed increase is allowed, the rate of VAT in Nigeria will still remain the lowest on the continent. The imperatives of this proposal is anchored on the urgent need to diversify the revenue base of the country from the unwholesome situation whereby government revenue is dependent up to 70 per cent on the extractive sectors of the economy. It must be noted here that the attempt to achieve this desired diversification of the economic base has been on the cards since the introduction of The Structural Adjustment Programme in 1986 without any noticeable desired progress. There is also the need to urgently find other revenue sources to commence the termination of the current practice whereby the country borrows to pay salaries and also in view of many funding gaps for meeting the requirements of other desirable social investments. We are not unmindful of counter proposals by some powerful voices to the effect that the salaries of principal fiscal authorities should be halved to generate such money. To my mind, that misses the point as the responsibility of the determination of the levels of remunerations in the country is domiciled with the National Salaries, incomes and wages Commission and the argument really is that we have an anomaly on our hands which we must seize the next opportunity to rectify.

In the literature it has been argued that VAT increases are not known to lead to sustained inflationary pressure on the long run. This argument is not too difficult to rationalize as the increase is not borne by the manufacturer or producer but included as the cost of the goods and services to the final consumer is determined. We recommend that this important observation be corroborated by the commissioning of an empirical study as this has been the main argument against increase in VAT rate. The proper administration of this tax historically often resulted in quantum increase in the revenue that accrues to the treasury at a level that might not be obtained from the proposed cut in levels of remunerations. For instance in 2016 VAT accounted for additional revenue of two trillion Naira at the current rate and it is famed to be seamless to administer at minimal administrative costs. Quite unlike direct tax, this tax is difficult to evade. The only problem experientially is obtaining the cooperation of receiving agents to make prompt remittance of such proceeds to the treasury. VAT is a popular indirect tax which most common markets would insist on its existence as one of the preconditions for admitting any member country.

The expectation is that with the light which has now been shed on this problem as we attempted to reinforce the impression that VAT must be clearly distinguished from the direct taxes which most people are familiar with particularly from the consideration of the fact that it is a tax which is selectively applied, the fact that the current rate in Nigeria is probably the lowest when compared to any other country in the world, the argument that in the long run it is not inflationary which we have asked to be further subjected to empirical investigation, and the urgent need for alternative revenue sources to argument what accrues to the treasury now to fund inadequately funded social sectors of the economy; education and health, the opposition to this proposal should be reconsidered even if one must admit that part of the problem has been credibility gap which the fiscal authorities suffer as sufficient discipline has not been demonstrated in husbanding the resources that hitherto accrued to the treasury.

****

The New Times – Rwanda

Clearing the Ground for Post-Conflict Reconstruction

By: Giorgio Chiovelli, Stelios Michalopoulos & Elias Papaioannou

This year marks the 20th anniversary of the United Nations Anti-Personnel Mine Ban Convention. Since the treaty entered into force, armed conflicts in Africa and elsewhere have steadily receded, and democratization, coupled with international monitoring, has led to a reduction in the use of landmines and other improvised explosive devices (IEDs) worldwide. At the same time, inspiring individuals and organizations have continued to navigate difficult environments to assist victims and clear minefields.

But that progress is now at risk. According to the Landmine Monitor 2018, the use of landmines/IEDs is rising at an alarming pace, as are fatalities and injuries from these devices. Most of the casualties are in Syria, Afghanistan, Yemen, Nigeria, Myanmar, and Libya, where rebel militias, government forces, and extremist groups such as the Islamic State have laid new minefields. Because of past and ongoing contamination, the explosive remnants of war continue to affect the lives of millions of people, particularly civilians and children, in around 50 countries.

As the international community focuses primarily on limiting the use of landmines, preventing deaths, and assisting the injured, much less attention goes to how these devices threaten post-conflict recovery efforts. The estimated one million IEDs deployed in Yemen and thousands of similar devices in Syria narrow considerably the path to peace and reconstruction in these countries.

Complicating matters further, clearance operations are slow, relying on imperfect detection methods and incomplete information. Many minefields were created years or even decades ago, and may have been moved by rockslides, floods, or other natural causes.

Demining suffers from coordination problems, as the process is fragmented among various nongovernmental organizations and UN agencies. Governments’ weak post-conflict state capacity makes planning and coordination even harder. The high cost of clearing mines often leads to donor fatigue. Given these challenges, how should demining efforts proceed?

For the past few years, we have studied the impact of landmine clearance in Mozambique, the only country to have progressed from being “heavily contaminated” (in 1992) to “landmine free” (as of 2015). Between 1977 and 1992, Mozambique suffered from a civil war that left hundreds of thousands of people dead from violence, malnutrition, and hunger. More than four million of the country’s roughly 14 million people were displaced.

According to a 1992 Human Rights Watch report, parts of Mozambique had been “reduced to a stone age condition” and would have to be rebuilt “from scratch.” Thousands of minefields scattered throughout the country, however, made reconstruction challenging. Government troops had used mines to ring-fence villages, towns, and basic infrastructure, while RENAMO, a militant group backed by Rhodesia and apartheid South Africa, had used them extensively in its strategy of terror. There were even older minefields left from the country’s 1964-1974 war of independence, when both independence fighters – FRELIMO – and the Portuguese military used them for various reasons. Militias, thugs, and even commercial companies used landmines for military purposes, protection, and terror.

While early post-war assessments suggested that there were as many as one million landmines strewn across Mozambique in 1992, our data uncovered around a quarter-million devices across 8,000 hazardous areas. Yet, whatever the precise number, it takes only a few mines to terrorize civilians and curtail economic activity.

In our study, we tracked how the evolution of local economic activity in Mozambican localities, reflected in satellite images of nighttime light density, responded to mine clearance operations between 1992 and 2015. We found that economic activity picked up modestly upon full clearance, implying that demining does indeed facilitate development. More important, we determined that demining results in larger relative gains when it specifically targets roads and railroads, as well as villages that host agricultural markets.