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Japan overtakes China in bid to provide Kenya with fresh loans

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Japan has leapfrogged China in a bid to provide Kenya with fresh loans for developmental projects for the second year running.

While China has cut fresh financial commitment to the East African nation, Japan, on the other hand, has now moved to the top of the list of bilateral lenders to the country.

In November last year, President Xi Jinping of China had disclosed during the Eighth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) that China would reduce investments in Africa by a third in three years.

Xi’s China had committed $40 billion to Africa, a 33.3 percent drop from the $60 billion in the last two FOCAC summits, which take place every three years.

A report by the Kenyan Treasury on Thursday, noted that the country’s budget estimates for the financial year starting July, listed Japan as the largest source of bilateral loans and grants, leapfrogging China which has been the biggest financier for nearly a decade.

“Beijing is projected to lend Kenya Ksh29.46 billion ($254.9 million) for the fiscal year 2022/23, a sharp cutback from Ksh140.03 billion ($1.2 billion) in the 2015/16 budget.

“That marks the second year in a row that China will trail Japan in bilateral loans, having committed Ksh21.25 billion ($183.9 million) in the current year ending June against Tokyo’s Ksh36.49 billion ($315.7 million).

“However, China remains the biggest bilateral creditor by far due to big-ticket deals it has inked with Kenya in the last decade to fund and build mega infrastructure projects such as roads and a modern railway.

“Kenya owed China $6.95 billion last December compared with $1.42 billion to Japan,” according to the latest data by the Treasury.

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Nigeria’s finance ministry unveils system to monitor tax exemptions

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Nigeria’s Ministry of Finance has unveiled the Incentive Monitoring and Evaluation Platform (IMEP), a cutting-edge computer system meant to make it easier to keep an eye on the tax costs connected to import duty exemption certificates.

In a statement released on Tuesday, Wale Edun, Minister of Finance and Coordinating Minister of the Economy, said it was part of a larger plan to cut down on tax spending and make sure that fiscal policies were helping the country’s economy grow.

Edun said the IMEP was meant to change how the Federal Ministry of Finance figures out how much the tax breaks for businesses, non-governmental organizations, and foreign groups affect the economy.

Since President Bola Tinubu took office, Nigeria’s government has been trying to change the country’s fiscal and monetary policies. This has led to bold moves by both the central bank and the tax advisory committee run by Taiwo Oyedele.

Edun said the ministry wanted to improve the monitoring and review of these exemptions by putting in place a strong automated tool. He talked about how the IMEP has many useful features, such as a mechanism for clawing back duties, electronic report generation, a central database for tracking, factory geo-location tagging, industry qualification status validation, integration with many government agencies, and sending demand notices to people who don’t pay their taxes.

“One of the critical objectives of the IMEP is to provide a framework that will prevent ineligible applicants from receiving tax benefits, enforce compliance with fiscal policy measures, and offer a comprehensive analysis of the economic impact of tax incentives.

“By doing so, the ministry hopes to curb the misuse of tax expenditures, support the realisation of economic outcomes from fiscal incentives, and enhance the direct measurement of tax incentives’ effects on the economy,” he noted.

Edun says the system is meant to give a framework to checkmate and limit applicants who aren’t qualified, make sure that strict fiscal policy measures are followed, and give a strong analysis of how tax incentives affect the economy.

“Overall, the introduction of the IMEP represents a significant step towards reducing the cost of tax expenditure and ensuring that tax incentives have a positive impact on the Nigerian economy. This initiative is part of the government’s commitment to fostering transparency, accountability, and efficiency in the management of the nation’s resources,” he explained.

In December, the Nigerian Investment Promotion Commission (NIPC) said it granted three years of tax exemption to 34 companies in 2023.

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Nigeria’s inflation hits 28-year high of 33.20%

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The recent gains of Nigeria’s Naira as the best-performing currency worldwide in the last month have had little or no impact on the consumer price index in the West African country as its inflation rate reached a 28-year high of 33.20%.

According to the latest data from the National Bureau of Statistics, Nigeria’s inflation has continued its 15-month-a-row surge driven by soaring food and energy costs despite the central bank’s rate hikes aimed at halting its ascent.

This was 10.37% more than the 21.9% inflation rate seen in March 2023. Year-over-year, rural inflation was 31.45% in March 2024. Rural inflation fell from 2.9% in February 2024 to 2.87 % in March 2024, which was a 0.20 percentage point drop from February 2024.

It went up by 5.71% points from March 2023 to March 2024, when it was 19.79%. The average rural inflation rate for the twelve months finishing in March 2024 was 25.50%.

Food prices went up by 40.1% a year in March 2024, which was 15.56 percentage points more than the rate of 24.45% a year earlier. The statistics office said food and non-alcoholic beverages were the biggest contributors to the pickup in inflation. Food inflation rose to 40.01% year-on-year, from 37.92% a month earlier.

Since President Bola Tinubu ended an expensive gasoline subsidy and devalued the naira twice in his first year in office, price pressures have grown. To get the economy off of subsidies that have hurt the government’s finances, the government recently raised energy rates for people who use the most electricity.

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